Recently, I boarded a Nissan matatu on my way to Sigona Golf Club, off Nairobi-Nakuru Highway, 17km from the city centre. Once we hit the highway, the conductor started collecting his dues. Soon an argument arose between the conductor and five of the 14 passengers: was the fare Sh50 or Sh70? The conductor insisted the fare was KSh70, the five passengers said they had been told by the freelance touts at the terminus the fare was KSh50, and therefore, they were paying not a penny more.
The back and forth shouting match went on until we reached the Shell Petrol Station, one kilometre up from Gitaru bus stop. At the petrol station, that argument continued for 20 minutes – the five passengers were adamant that they were being ripped off, the conductor retorted he was not in the business of philanthropy: The conductor gave them an ultimatum: They either pay him the full amount or the driver reports them to the police at Kikuyu Police Station.
They dared him to do so whereupon the driver took us straight to the police station. Had I alighted at the petrol station, I could have walked to the 500m to Club. At the police station, the cops were gleeful they would have some “culprits” to manhandle and extort from. The five passengers were bundled out and locked in the cells. As the matatu turned to take us to our respective destinations – the end destination was Kiambaa another four kilometres from Sigona Club – a more sober debate among the remaining nine passengers dominated the talk. Was it really fair to have let the five be locked up at the police station for lacking a mere Sh20 each? The passengers were unanimous it is highly unlikely they were bluffing: nobody in his right senses would want to spend time in a Kenyan police cell, just because a matatu guy was cheating them off such a small sum.
Because I was seated in front with the driver, I asked him why they had taken the drastic step,. “Boss, business has been very bad, very bad,” he said solemnly. “The matatu owner has been breathing on our neck because we have not been meeting his targets. Because matatu crews already have a bad name, the proprietor doesn’t believe us when we tell him business is bad: he thinks we are stealing from him. There are days we have not paid ourselves, just to make sure we deposit his full day’s collection.” This was one of those days that if they did not do their math wisely, they would go home without pay. “It is those pennies collectively that take care of the larger currency notes. Can you for a moment ponder, how much money we would be losing if every trip we forewent Sh100, just because some people cannot pay the full amount?”
Discussion in the matatu turned to how life had become harder: “It is very possible the five passengers did not have the extra Sh20 and, if they did, it had been pre-budgeted,” said one passenger. “Following the recent heavy rains, sukuma wiki (kale) has become very cheap. With Sh20, you could buy enough for supper to be eaten with ugali and live for another day. Today, there is no such thing as little money. Every coin counts,” he summed the discussion. The passengers all agreed that money had taken to hiding and murmured to themselves in Kikuyu about the irony of how, even after voting for Uhuru Kenyatta twice, life had become twice as hard. “No tukeyumeria kweli na mathina niguo maingehire?” (Will we ever make it and the way our problems seem to multiply?).
Today, there is no such thing as little money. Every coin counts
The passengers talked off how people had become more and more uncaring and wicked and moaned loudly that if only Kenyans were a little more mindful of each other, life would be a lot better. I suspected they were shying away from candidly and publicly discussing the elephant in the matatu, which if they did, would lead them to pinpointing why they truly were facing economic hard times: bad political choices, propelled by a vicious ethnic entrapment that they had over time been politically socialized to believe was their fate.
The trip back after my meeting was even more revealing. I crossed the highway to catch a matatu back to the city centre. The Nissan matatu I took had two other passengers. It had come from Kiambaa. Between Kiambaa and Sigona, there is one major terminus – Zambezi. It was edging towards 2.00pm and if the matatu did not secure enough passengers at Zambezi, it would not augur well. From Kiambaa to the city centre, there are 11 major stops along the highway: Kiambaa, Zambezi, Gitaru, Muthiga, Kinoo, 87, Uthiru, Kangemi, Agriculture (adjacent to the Kenya Agricultural & Livestock Research Organization), Safaricom and Westlands. By the time we reached Agriculture stop, the matatu had not added a single passenger.
The driver was clearly agitated: “Oo niguo tukuruta wira?” he groaned. “Is this how we are going to get the job done?” The driver said the whole of this year, his matatu business had been hard hit by a lack of travellers. “Why weren’t people travelling? It is not as if they had relocated,” he mused aloud. At the Agriculture stop, a few passengers boarded, paying Sh20 to the city centre. “These people cannot even afford to pay Sh30?” lamented the driver. Usually the fare, especially at the onset of the rush hour, would be up to Sh40.
After alighting at the terminus on Kilome Road in downtown Nairobi, I looked for a freelance tout to explain to me the oscillating dynamics of matatu fares for people going to Kiambaa and Limuru. “During off-peak hours, it is normal practice for matatus, big or small, to charge Sh50,” said Davy. It is understood that off-peak hours are from 9.30 am–3.00pm and from 8.30pm–10.00pm. “The fare for peak hours ranges from Sh70 to even Sh100 when there is a downpour.” At the moment, the matatus were asking for Sh80. Davy told me an interesting story: “The passengers have learnt how to play the waiting game with matatus. Most of the menfolk would rather go home after 8.30pm, when the fares have substantially dropped, even if it’s by Sh10.”
Davy said the matatu owners have been itching to increase the fares since the beginning of the year, but they sense rebellion from the passengers. “Already they have surreptitiously increased the Kiambaa fare by KSh10 to KSh80 and the people have been grumbling quietly about the increase, which they have been made to believe is temporarily.” According to Davy, the matatu owners really want to hike the fares, but they do not know how to without raising a commotion among the people. When I asked what was necessitating this urge, he blamed operating costs and low business trends over the previous last eight months. “The business class had hoped that the [9 March] handshake between President Uhuru Kenyatta and Raila Odinga, would work magic, return the business climate back to normal, but business had stagnated,” said Davy. A freelance tout for close to 10 years, Davy told me he had worked in the matatu industry long enough to know when people had surplus money in their pockets. “People are broke, their disposable income has dwindled, so they are not travelling as frequently. The cost of living has also certainly gone up,” he said.” People today are budgeting to the last shilling.”
“The business class had hoped that the [9 March] handshake between President Uhuru Kenyatta and Raila Odinga, would work magic, return the business climate back to normal, but business had stagnated.”
I had gone to Sigona to meet a petroleum products’ magnate who asked not to be named. “Business is tough my friend,” said the tycoon. “The first half of this year, we’ve have not done any meaningful business and so, the profit margins have been dwindling. The increase in the fuel levy in the budget was not helpful: Business has become even harder – and the profit margins have become slimmer. This is a volume business; if you don’t move volumes, you’re not doing any good business.” He said that bureaucrats at the Ministry of Energy were not making life for oil businessmen any easier when they went to renew their import licenses, among other things. “They’ve been unrelenting and squeezing us for even heftier bribes which, as you know, run into in the millions.” Life for the ordinary mwananchi was about to get even tougher as they passed on the costs, he hinted.
Already, he could tell the people were experiencing hard economic times. “The vehicular movement in Nairobi has certainly reduced. There are less traffic jams, because many people are leaving their vehicles behind, parked in their compounds, only using them when it is very necessary. I have been long enough in this oil business and understand the patterns of fuel consumption vis-à-vis motor vehicle movements.” The businessman, apart from distributing petroleum products in bulk across the East and Central African region, also owns, in partnership with others, several petrol stations across the country and in neighboring Uganda. “Fuel usage in Kenya is at its lowest. People are facing economic hard times.”
To fully comprehend the impact of what the oil tycoon was saying, I looked for my matatu crew friends to explain how the fuel increase would affect their businesses and customers. “Diesel was increased by six shillings per litre, from Sh98 to Sh104,” said my tout friend. “For sure, as night follows day, we will increase the fares – all the matatus Saccos in Nairobi have met and agreed. It is just a matter of time. We’ve have no choice but to do that. Whether people resist or not, will they walk to work?”
The matatu crew friends said, business had become tougher: “It is as if people have migrated. Since the beginning of the year, people have not been moving around as much, so we had to find a way of increasing the fares, but quietly. If, say, we used to charge Sh30 off peak hours, we increased it to Sh50. Likewise, if during peak hours the fare was Sh70, we increased it to Sh80. We knew people would be up in arms, if we just raised the fares formally and directly and publicly.” The clarification somehow explained the tiff between the conductor and the unrelenting passengers, who could not part with their Sh20.
“For sure, as night follows day, we will increase the fares – all the matatus Saccos in Nairobi have met and agreed. It is just a matter of time. We’ve have no choice but to do that. Whether people resist or not, will they walk to work?”
Budgeting to the shilling, as Davy the tout told me, were the key words. Because it is not only the folks who use matatus and live in less privileged neighbourhoods that are currently feeling the pinch, in money matters. A Runda housewife who buys all her green groceries at City Park Market, opposite the Aga Khan Hospital in Parklands area, told me how for the first time she had to write down her shopping list of all the vegetables she needed. “When I unleashed list the next time I went to the market, carefully picking what I wanted and not just throwing things in the basket, my fruits and vegetables vendors asked me: “Nikii thiku ici mutaragura indo? Mwaga kugura, murenda tucitware ku?” (Why are you people not spending as much? If you don’t buy these goods, where do you expect us to take them?)
Her husband, a real estate magnate, had told her she needed to curb her free spending mania. “So, I have also taken to writing a list when I’m shopping at my favourite supermarket; Chandarana. Do you remember how I used to just shop, throwing anything and everything in the trolley? My budget has now been drastically trimmed and I must account for every penny spent. Kweli (truly) times are hard, that it is me, daughter of Mwaniki, who has taken to writing a shopping list.” She said her hubby had told her, money had become scarce and the country had yet to achieve political equilibrium. “I think he has decided to hoard the money, until such a time, there will be money in the economy.”
“Nikii thiku ici mutaragura indo? Mwaga kugura, murenda tucitware ku?” (Why are you people not spending as much? If you don’t buy these goods, where do you expect us to take them?)
If the posh people, like my friend from Runda estate, were scaling down on their spending, what about the rank and file? I decided to pay a visit to Githurai Market, one of the busiest markets in Nairobi. Githurai Market is 10km from Nairobi’s central business district, off the Thika Superhighway. It has one of the widest catchment areas that goes all the way to Thika town (30km from Githurai) and its environs, apart from its Nairobi area shoppers.
The market, which is completely controlled by the Githurai chapter of the Nairobi Business community aka Mungiki, receives truckloads of fresh produce from as far as Tanzania and eastern Uganda. I was going to meet Susan Mweru, a fruit seller, who has been transporting oranges and tangerines from Michugwani and Mwanza in Tanzania to Githurai Market for the last five years. “We are reeling from very tough economic hard times, there is no business…‘aahh wira we thi muno’ (business is really low),” she moaned.
“In the best of times, I would offload a 12-ton truck of top-class oranges from Tanga, home of sweetest oranges in East Africa, in two days flat and I would be on my way back to Tanga to bring more oranges.” She told me the oranges would be snapped up by retail fruit sellers from as far as Makongeni in Thika town, and as near as Kasarani, Mwiki, Roysambu, and Ngara market, which is just 7km from Githurai, in Nairobi.
She would alternative her travels between Tanga and Ukerewe, the largest island on Lake Victoria, where the juicy fruits much loved by Nairobi’s well-to-do are grown.“Itonga cia Garden Estate, Kahawa Sukari, Kahawa Wendani na Juja mokaga kugura matunda na waru guku Githurai thoko.” (The rich people of Garden Estate, Roysambu, Kahawa Sukari, Kahawa Wendani and Juja, come to buy their fruits and potatoes at Githurai Market.)
However, when I went to see her, she had not travelled for the third consecutive week. “Even these rich people, they are not spending: The consignment I brought in three weeks ago is still with me – the fruits have been moving at a snail’s pace. Nikii kiuru? Ndiramenya kurathie atia.” (What’s wrong? I don’t understand what’s going on.)
Mweru introduced me to her colleague, Muthoni, in the market, who majorly deals in potatoes, some of which come from as far as Moshi, whose rich and fertile red soil is akin to that of Kiambu County. She is one of the biggest potatoes sellers in the market. “Before things become bad, I’d move up to six sacks of potatoes daily, and you know how they pack those sacks – nearly half of the potatoes are packed outside the sack itself,” said Muthoni, sitting on one the potato sacks. “Today if I sell two sacks in a day, I count myself lucky…nikuru muno” (the situation is very bad).
The women told me they had hoped the national budget read in June would somehow alleviate the situation – it was hard for me to understand their ubiquitous optimism – but said their hopes had been dampened by the tax increases on petroleum and paraffin products. “You know if the government increases fuel, it negatively affects everything else.”
“Life is about to become even harder for the ordinary folk,” says Joy Ndubai, a tax expert with Oxfam. “The Finance Bill 2018, which proposes to hike fuel and kerosene will impact on other mwananchi necessities such as electricity, food and transport. The Bill intends to do away with indirect taxes, that is zero-rated and excise duty taxes. Take it from me, if that happens, the price of unga Kenyan (staple food), will shoot up and matatu fares will increase manifold and life will become really hard for Kenyans. Perhaps the Unga Revolution squad should start regrouping for foodstuff protests in the coming days,” said Ndubai tongue-in-cheek. The Unga Revolution was a civil society initiative basically driven by Bunge la Mwananchi (People’s Parliament) members, who, in 2017, loudly agitated for reduction of price of maize flour, which had skyrocketed and was out of reach of the ordinary Kenyan.
Ndubai says the government wants to get rid of Value Added Tax (VAT) rebates or refunds that it gives manufacturers. Indirect taxes such as VAT on consumable goods such as, bread, milk and sugar, are hidden in the prices and in order for the government to cushion manufacturers, it encouraged them to reclaim the 16 per cent tax rebates from its exchequer. This is what is referred to as zero-rating. “What it will mean now is that the government will remove the zero-rating and the manufacturers will be exempt from claiming any tax relief. Sounds good on paper? What this means is that the consumer will have to bear the burden of increased taxes on everyday commodities.”
One of the most common expenditure by wananchi that will be hard hit is electric power. “The cost of electricity is certain to go up, because of the intended increase of fuel levy. This is because we still rely on diesel engines,” said Ndubai. “Manufacturers had been given a 30 per cent allowance on electricity. Electricity was among the expenditures that manufacturers count, at 100 per cent, when deducting their profits [for tax purposes]. So now, what this means is that the manufacturers will add 30 per cent over and above, to their respective expenditures. Guess who the added 30 per cent will be pushed to? The mwananchi.” It was as if the national budget was written by the Kenya Association of Manufacturers mandarins, observed Ndubai. “There isn’t anything pro-poor in that budget, the budget favours the manufacturers and the big boys all the way. Majority of Kenyans are too bamboozled by real big, impossible numbers, trillions of shillings, to really take time to understand” the implications of the budget.
“What it will mean now is that the government will remove the zero-rating and the manufacturers will be exempt from claiming any tax relief. Sounds good on paper? What this means is that the consumer will have to bear the burden of increased taxes on everyday commodities.”
The tax expert said the Kenyan people need to wake up to the realization that their lives will soon be very difficult to manage and they should come out to protest to safeguard their social interests because that is the only way they will be heard. She gave me the example of Jordan and how Jordanians had forced their Prime Minister out of his office, through mass street protests and camping out at his office.
A conservative society, Jordanians rocked the capital, Amman, with a wave of mass protests, culminating in the resignation of Prime Minister Hani Mulki. They were protesting austerity measures imposed by the International Monetary Fund on the Kingdom. Unemployment and stiff price hikes occasioned by high inflation had become unbearable and on June 3, 2018, 5,000 Jordanians camped at Mulki’s office. Perhaps, unsurprisingly, the critical price hikes were in electricity and fuel. In 2012, the same Jordanians had also gone onto the streets to protest against increasing economic hard times, after the government bowed to IMF’s stiff conditions by cutting off fuel subsidies, all in an attempt to secure an IMF loan to lower the public debt. Jordan’s national debt, which runs into hundreds of billions of shillings, just like Kenya, is equivalent to 95 percent of the country’s Gross Domestic Product.
The mere mention of IMF for some Kenyans old enough to remember the 1980s, sends cold shivers down their spine. The Washington-based financial institution, once described by Mwalimu Julius Nyerere as The International Ministry of Finance, introduced what came to be known as Structural Adjustment Programmes (SAPs) in many of the Africa countries heavily indebted to western nations, beginning 1980. Prof Said Adejumobi, a political economist who has written numerously on SAP wrote in his paper in 1997; The Structural Adjustment Programme and Democratic Transition in Africa: “For Africa, the 1980s could be better described as the ‘adjustment decade’ as most African countries, in response to their ailing economic conditions, introduced one form of adjustment reform or the other.” Other political scientists, such as Adebayo Olukoshi, called the 1980s the “lost decade” for Africa.
Kenya first became an IMF patient in 1980; that is when the first SAP was introduced in the country. To fully comprehend what SAP meant and did to Kenyans, I will quote Adejumobi: “But what is the political import of SAP? SAP is a class project which seeks to create a ‘stable’ economic environment for the accumulation of capital by local and foreign bourgeoisie, while suppressing labour through wage freeze, insistence on strict work sector, reduction in workforce, (retrenchment), especially in the public sector. It also seeks to contract the provision of social services and infrastructure, like health, education and transportation.”
During the just ended G7 meeting in Quebec, Canada, President Uhuru Kenyatta was spotted engaging Christian Lagard, the IMF’s Managing Director, on the sidelines. In his article – One Week in March: Was the Handshake Triggered by the IMF? for the E-Review – John Githongo, wrote: “On the 6th of March, the Minister of Finance, Henry Rotich, made the surprise announcement that the government was ‘broke’. He would deny this a day later in rather incongruous fashion. On the same day he and the Central Bank Governor Patrick Njoroge essentially signed on to an IMF austerity programme. It wasn’t the traditional IMF programme circa 1980/90s, but it nevertheless was an acknowledgment that we were complying with a range of ‘confidence building’ measures ‘agreed’ with the IMF as we renegotiated our expired precautionary facility with them.” David Ndii, reiterated in another E-Review article, A Quest of Power – Why Ethiopia’s Economic Transformation is a Cautionary African Tale, the fact that “Kenya is surviving on speculative capital inflows and juggling debt as it negotiates an IMF bailout.”
To add salt to injury, Ndubai told me that the cost of M-Pesa transactions had gone up as a result of a 2 per cent increase in excise duty imposed by the government. M-Pesa is today the most transacted money transfer channel in the country. “The biggest population that uses M-Pesa is the ordinary man and woman, especially the rural folk and urban poor, because these people do not have bank accounts. When M-Pesa came, it was relief, but now it may end up being a burden. Think of the rural elderly who receive pensions. With the increased tariff, which Safaricom is going to push to the consumer, it is going to be difficult for the poor people of Kenya to effectively use mobile transfer platforms.”
“Kenya is surviving on speculative capital inflows and juggling debt as it negotiates an IMF bailout.”
I found out this to be true, when I went to meet Mweru at Githurai Market. She asked me whether M-Pesa charges had been increased. “I do all my payment through M-Pesa and I have noticed these people are taking a lot more of my money. This is very unfair,” she lamented. Going to Githurai Market had also revealed something else: during off-peak hours, Githurai residents pay Sh20 as matatu fare to the city centre and vice versa. “But some matatus were being adventurous by charging Sh30,” said Mweru. “If they push the fares further up, they are going to annoy the people. I think they are testing the waters to see how the people are going to react.”
I now understood what Sh20 meant to the five matatu travellers on their way to Kiambaa: in Githurai, it covers your entire fare back home. When I returned to Kiambaa stage at Kilome Road terminus after talking to Ndubai, the fares had been pegged at KSh100, irrespective of the weather. Hard times indeed.
Sudan’s (Non-)Arab Spring: Lessons from the April 2019 and Other Uprisings
The political protests in the Sudan, which began last December in the working class city of Atbara, and the perennial power struggle that triggered political instability in South Sudan, speak to the failure of the Sudanese political elite to manage the post-independence socio-economic and political engineering of the state.
The Sudanese people have a cultural trait peculiar and typical of them – a cultural practice that downplays the negative in favour of the positive, that treats individualism and egoism as less important than the general welfare of society and that readily sacrifices for another or the country. Western individualism scarcely appeals to the Sudanese sentimentality and sensibilities, whether they are southerners (jinubieen), westerners (garaba), or northerners (shamalieen).
In the words of Prof. John Lonsdale, the Sudanese, in their different social formations, used to live as negotiating ethnicities until colonial rule turned them into competing tribes. More than two hundred years of common history – notwithstanding the bad memories – are difficult to erase or turn away from; socially, they will always run into each other. However, the long history of bitter and violent struggles against foreign occupation, injustice, political repression and totalitarian regimes, unfortunately, failed to sublimate the Sudan into a nation-state although the people yearned for territorial unity. It is not by chance that the protesters in Khartoum hold the secession and independence of South Sudan as one of the criminal charges against the deposed dictator, Omer Hassan Ahmed el Bashir.
The political protests in the Sudan, which began last December in the working class city of Atbara, and the perennial power struggle that triggered political instability in South Sudan, speak to the failure of the Sudanese political elite to manage the post-independence socio-economic and political engineering of the state. Myopia, religious-cultural narrow-mindedness and intolerance, which engendered political exclusion, social discrimination and economic marginalisation or neglect, culminated in the partition of the Sudan, the wars in Dar Fur, Nuba Mountains, and the Blue Nile and civil unrest in eastern Sudan. The crystallisation in the centre of a tiny minority at the helm of the country’s political and economic power at the expense of the vast majority of the Sudanese in rural areas is the source of Sudan’s predicament.
The mass action (processions, demonstrations and picketing) in Atbara, Khartoum and the major cities of the Sudan point to a salient political reality that characterised its regional distinct socio-economic and cultural development. The mass movements in the cities and towns in northern Sudan contrast exponentially with the military action undertaken in rural parts of the Sudan (southern Sudan, Dar Fur, Nuba Mountains, Blue Nile and eastern Sudan), reflecting the differential socio-economic and political evolution of the Sudanese state since the Turco-Egyptian era [1824-1885].
This reality points to the fact that a degree of social and economic development results in transformation of means and relations of production, and engenders a heightened social awareness and political consciousness. In this respect, it makes it easy for the people to establish a tradition of political organisation combined with action in support of socio-economic and political rights. This process occurred in northern and central Sudan in the form of the construction of the railway line from Wadi Halfa to Khartoum (1898), the Gezira scheme (1925) and the evolution of manufacturing light industries in Khartoum North, leading to the emergence of a conscious and politically organised working class that employs processions, demonstrations, strikes, picketing and civil disobedience in support of their demands for social, economic and political rights.
This is the third time in the Sudan that mass action in the form of a popular uprising (intifadha) ousted a military-based totalitarian regime. The first popular uprising was in 1964 (Ibrahim Abboud) and the second was Gaafar Numeri (1985).
On the other hand, however, rural Sudan (southern Sudan, Dar Fur, Nuba Mountains, Blue Nile and Eastern Sudan) is characterised by poverty and ignorance due to dominant traditional modes and relations of production, natural forces and superstition. As a result, social awareness and political consciousness is inordinately low; there is an obvious lack of tradition and culture of organised political action. Thus, to support the demands for social, economic and political rights, the people in rural Sudan use violence as their chief means of mobilisation for changing the political system.
This is the third time in the Sudan that mass action in the form of a popular uprising (intifadha) ousted a military-based totalitarian regime. The first popular uprising was in 1964 (Ibrahim Abboud) and the second was Gaafar Numeri (1985). The common denominator is these popular uprisings was the dominance of workers and farmers’ trade unions, professional associations, the student’s movement led by the Khartoum University Students Union (KUSU) and the political parties playing in the background. Without the workers’ strikes, picketing and sit-ins, civil disobedience wouldn’t be effective. Another feature of the two uprisings of 1964 and 1985 in the cities was that there were parallel military actions by Anya-nya (1955-1972) and the SPLM/SPLA (1983-2005), which contributed to weakening the incumbent regime. The National Islamic Front (NIF) seized state power in a military coup on 30 June 1989 and installed the Ingaz (salvation) system. It exploited the apparent weak performance of the Sudan Armed Forces in the SPLM/A spearheaded war of national liberation in southern Sudan.
Consequences of the paradigm shifts by the SPLM leadership
In a previous essay, I argued that the colonial education system, which essentially was Christian, anti-Arab and anti-Islam, coupled with the policy of annexing the southern provinces to British East Africa, instilled into the southern Sudanese political elite fear and hatred of the northern Sudanese. Thus, at independence, in a country dominated by highly educated northern Sudanese, this fear and hatred turned into a deep-seated inferiority complex in the southern Sudanese political leaders’, notwithstanding the conspicuous power and wealth asymmetry between the two groups.
As a result, the southern Sudanese pursued a policy line that separated them from the northern Sudanese in a common struggle. For instance, in the run-up to independence (1947), there was a strong voice among the southern Sudanese politicians that the southern provinces would remain under British rule while northern Sudan gained its independence. The nationalist trend triumphed in the end and Sudan became independent as one country. This attitude among the southern Sudanese elite – of shunning unified political action with northern Sudan in favour of a separate and parallel struggle against the same oppressive political dispensation – has been the Achilles’ heel in the Sudanese body politic. But even within southern Sudan, this attitude was echoed in the “kokora” (redivision), which culminated in Nimeri dismantling the southern region and the abolition of self-rule that the southern Sudanese had won in the Addis Ababa Agreement, rather than in unified political action together with northern Sudanese opposed to Numeri.
The ideological and political shifts…pushed the SPLM/A into negotiating liberal peace and a comprehensive peace agreement (CPA). It also rescued the Ingaz regime from collapse, extending its life and enabling it to wage war and commit war crimes in Dar Fur in 2003.
The paradigm shifts in the early 1990s, which the SPLM leadership struck following the collapse of the world socialist order, smacks of this attitude of separatism. The SPLM’s ideological shift from revolution to neoliberalism coincided with the political shift from “united secular New Sudan” involving all the oppressed, political excluded and marginalised Sudanese to the right of the people of southern Sudan to self-determination. Had the southern Sudanese- dominated SPLM/SPLA honestly pursued a revolutionary agenda for destroying and restructuring the Sudan in order to meet the aspirations of its people for freedom, justice, fraternity, Omer el Bashir would have fallen in 1997 when he suffered serious military setbacks at the hands of the SPLA in war theatres in southern Sudan, Nuba Mountains and Blue Nile, and at the hands of the New Sudan Brigade in eastern Sudan.
The ideological and political shifts (which made the war of national liberation a southern Sudanese movement, an obvious betrayal of the Nuba, Funj and Beja African groups in northern Sudan who joined the war on the basis of having been marginalised, oppressed and discriminated against), pushed the SPLM/A into negotiating liberal peace and a comprehensive peace agreement (CPA). It also rescued the Ingaz regime from collapse, extending its life and enabling it to wage war and commit war crimes in Dar Fur in 2003.
In fact, the secession of South Sudan left virtually intact the Ingaz system. It strengthened the Ingaz grip on power in the Sudan, enabling it to eschew the issue of democratic transformation on which the CPA was predicated. Once South Sudan was gone, the regime had no political military force to restrain its imposition of the strict Islamic code on the people of the Sudan. It immediately unleashed war on the SPLM/A-North in the Nuba Mountains and Blue Nile. The regime exploited the South Sudan-Sudan border war (2012) in terms of resultant acute economic difficulties in the Sudan, and the eruption of the civil war in the Republic of South Sudan (2013) to strengthen itself vis á vis the armed and political opposition in the Sudan.
Genesis of Sudanese popular uprisings against dictatorial regimes
According to Dr. Hassan Abdalla el Turabi, the Islamic scholar and chief ideologue and architect of the Ingaz system, “the Sudanese masses struggle to bring down military dictatorships while the traditional political parties create conditions for military coups”. To a large extent, this statement carries the truth of the dynamics of the Sudanese body politic since 1958.
Prior to contact with European colonialism, the Sudanese people lived as negotiating peaceful ethnic chieftaincies and kingdoms. However. this situation changed when a repressive and corrupt Turco-Egyptian administration (Turkiya) imposed itself.
The popular uprisings are rooted in the nature of the Sudanese people’s sophist Islam, which is dominant in northern Sudan, with its proximity to Egypt and Europe. As a faith, culture and state in one, Islam, unlike Christianity, has the capacity to arouse in people passions against rulers who are corrupt and unjust. This explains how Mohammed Ahmed el Mahdi succeeded to lead a revolt against the Turkiya (1824-1885) to establish an authentic indigenous Sudanese state (1885-1898). It is this progressive dimension of the Islamic faith that provides energy to enable the Sudanese to quickly mobilise into revolutionary political actions, like the Mahdist’s revolution (1881) and the White Flag Revolution (1924) to mention a few.
The re-conquest of the Sudan and the establishment of the Anglo-Egyptian Condominium (1899) opened the Sudan, particularly northern Sudan, to modernity and to the emergence of a modern working class movement under the leadership of the Sudan Railways Workers Trade Union. This had enormous impact on the evolution of people’s social awareness and political consciousness; the already advanced nationalist movement in Egypt augmented and accelerated Sudanese nationalism, which began under the aegis of the “unity of the Nile basin”.
The Sudanese people, mainly the intelligentsia, benefited from the education opportunities in Egypt, and indeed, most nationalist leaders obtained knowledge and influence of modern ideas from contact with Egypt, which had invested interest in restoring the Sudan to the Egyptian crown. Thus, and because of the terms of the Condominium Treaty, the Sudanese Army evolved as part of the Egyptian Army in the Sudan commanded by British officers but with a tradition of fidelity to the homeland rather than the colonial authorities. This worked to the advantage of the Sudanese nationalist movement, leading eventually to the White Flag revolution (1924), which played out in critical political situations, when as a national institution it was forced to choose between the people and the repressive regime in power.
These and many other factors that cannot be enlisted here shed light on the genesis of Sudanese popular uprisings. It must be mentioned that the pattern of these uprisings was by no means uniform, although it could be said with confidence that the military coups have invariably followed a similar pattern, usually as a result of the failure of political parties to manage power and the democratic process. The northern Sudanese people are highly politicised and organised, which makes it easy for them to craft political action even at the residential neighbourhood level. This explains the ease with which they quickly establish networks of resistance or solidarity.
The second democratic and multiparty political dispensation (1964-1969) was not really democratic. Like the first, it suffered serious political hiccups as the traditional-theocratic political parties (Umma and DUP) and Islamic Charter Front (ICF) jostled for the promulgation of an Islamic Constitution to replace the Transition Constitution (1956) amended in 1964.
The dynamics and intricacy of Sudanese party politics pushed the then Prime Minister Ibrahim Khalil (Umma Party) to hand over power to Gen. Ibrahim Abboud on 17 November 1958 (ostensibly to take it back after six months after the political temperature had cooled down). The masses had to oust Abboud in October 1964, six years later. The October revolution, which the Sudanese people all over the world revere as a paradigm of its own, precipitated civil disobedience throughout the Sudan that paralysed the military government, forcing it to hand over power to a civilian government in eight days (October 21-28).
The second democratic and multiparty political dispensation (1964-1969) was not really democratic. Like the first, it suffered serious political hiccups as the traditional-theocratic political parties (Umma and DUP) and Islamic Charter Front (ICF) jostled for the promulgation of an Islamic Constitution to replace the Transition Constitution (1956) amended in 1964. The political right outlawed the Communist Party of the Sudan (CPS) and unseated its members in the Constituent Assembly to the chagrin and disappointment of the political left, which in reality led the October revolution now stolen by the right-wing politicians. This development paved the way for the military coup, which the leftist Free Officers Movement in the Sudanese Armed Forces, led by Gaafar Mohammed Numeri, pulled on 25 May 1969.
The leftist stint at state power was short-lived, primarily because of the ideological split within the CPS eventually working to the advantage of the ICF, which exploited the ideological void in the May regime left by the communist and revolutionary democrats. Following the Port Sudan agreement (1977) between Numeri and the National Front (right-wing political parties of Umma, DUP and ICF), Dr. Hassan el Turabi decided to join in order to eventually take over the May regime under the guise of political Islam.
Numeri’s abrogation of the Addis Ababa Agreement (1 June 1983), which established the Southern Region, and his imposition of Islamic Sharia laws (September 1983) created the conditions for his overthrow in a popular uprising on 6 April 1985. The dismantling of the Southern Region triggered war in Southern Sudan under the SPLM/A. At that time, the Sudan had gone into deep social and economic crises due to the structural adjustment programme (SAP) imposed by the World Bank and the International Monetary Fund (IMF). The Sudanese pound plummeted from 0.35 to 1 against the US dollar and further down until the dollar exchanged for three Sudanese pounds. The government could not provide social services. Drought and famine had struck in Dar Fur and Kordofan, causing massive population migration to Khartoum. All these factors and war in southern Sudan culminated in the March-April 1985 popular uprising and the fall of the May regime.
The popular uprising did not uproot the regime as was anticipated. The regime’s prominent ideologues and influential elements remained at large. The ICF leadership, now rebranded National Islamic Front (NIF), remained influential in the army and in the bureaucracy. The forces of the intifadha, ensnared by the army’s top brass decision to side with the demonstrators after weeks of bloodshed, gave in too quickly and left the May regime intact even though it had been removed from power. No wonder that NIF ranked the third largest political force in the Constituent Assembly elected in 1986, although its leader Dr. Hassan Abdalla el Turabi, was trounced in a Khartoum constituency.
The third democratic and multiparty-political dispensation departed from the trajectory after October 1964, but again the Umma Party, now led by Sadiq el Shadegg Abdurrahman Mohammed Ahmed el Mahdi, never internalised the lessons learnt after the October 1964 uprising. His prevarications and hesitation to implement the SPLM/A-DUP agreement of December 1988, notwithstanding the defeats his army suffered in war theatres, paved the ground for the NIF to usurp power in a military coup on 30 June 1989.
No human situation lasts indefinitely; political repression and all kinds of injustices end at some critical intersections and crossroads. The Ingaz lasted thirty years because of divided opposition to it; the southern Sudanese, who have been instrumental in the survival or demise of regimes and governments in the Sudan, unfortunately diverted from the Sudanese nationalist movement into secessionism…
The NIF, now rebranded Ingaz, is a modern political force in terms of its ideology and sophisticated political, security and intelligence organisation. It set to transform the Sudan in accordance with the Sharia and the Suna. It constructed a system of political repression, corruption, economic self-aggrandisement and set out to destroy or take over the tools of political resistance: workers’ and farmers’ trade unions, professional associations, and women’s, youth’s and students’ movements. It carried out Jihad in southern Sudan, Nuba Mountains and Blue Nile. During its tenure, tens of thousands of young men and women perished. Through political repression, a network of political patronage and ruthless security/intelligence service,s the NIF managed to establish an Islamic totalitarian regime in the Sudan for thirty years despite the split within its ranks (1999) that witnessed Dr. Turabi’s incarceration and the eventual formation of his Popular Congress Party (PCP) parallel to and competing with the National Congress Party (NCP).
The April 2019 uprising: Will it spell Ingaz’s total demise?
No human situation lasts indefinitely; political repression and all kinds of injustices end at some critical intersections and crossroads. The Ingaz lasted thirty years because of divided opposition to it; the southern Sudanese, who have been instrumental in the survival or demise of regimes and governments in the Sudan, unfortunately diverted from the Sudanese nationalist movement into secessionism, thus forfeiting their pivotal point of being the non-Arab and non-Muslim members of the Sudanese nationalist movement, which could have easily led to the construction of a Sudanese state based on the principle of “unity in diversity” – hallmarks of any democratic dispensation.
There have been attempted uprisings but to no avail since the Arab spring of 2011 that swept the regimes in Tunisia, Libya, Egypt, and Yemen. This time, the architects and leaders of “change and peace”, the Sudanese Professional Association (SPA), acted prudently so as not to repeat the mistakes of the past that permitted the “stealing” of the revolution. On 25 December 2018, which is not a public holiday in the Sudan after the secession of South Sudan, a group of twenty-one professionals (university professors, lawyers, doctors, engineers vets and others) released a public statement titled, “Such that the people’s revolution is not stolen: people’s revolutionary consciousness is the only guarantee for our people”, in which they outlined five important points they categorised as the five principles of the fourth people’s revolution.
These principles inter alia are: to overthrow the regime to stop the deteriorating socioeconomic and political situation in the country; never to allow change of the system from within, otherwise it is going to be Ingaz 2; although the pivotal role of the organised forces is welcomed in the overthrow and dismantling of the Ingaz system, changing the regime through a military coup should never the allowed; never to accept a Military Council on the basis of what transpired following the March-April uprising (1985), which eventually became May regime 2; the demand should be“a revolutionary council comprising the forces of change and whose mandate shall be national sovereignty.
The SPA and the Sudanese masses believe, and are convinced, that the revolution was not just to remove Omer el Bashir or the Ingaz regime for that matter, but to transform the Sudan’s falsified reality and restore its national dignity. There are even calls for the Sudan to quit the Arab League and return to its African roots, which has received support from the masses.
The SPA is following the principles to the letter, as reflected in the decision to camp the protestors into the precincts of the Armed Forces headquarters in Khartoum since 6 April, which marked the thirty-fourth anniversary of Numeri’s overthrow. This is a complete departure from the pattern of previous uprisings, which handed over power to the traditional political parties through fake or bogus elections. The traditional and theocratic political parties and the Islamic Charter Front had been using Islam, a faith to which the majority of Sudanese subscribe, as a political tool to dampen people’s consciousness, making it easy to ensnare them into voting them to power. If the demand now by the members of the SPA to liberate Sudanese politics from religion is met in the new dispensation, it will go a long way in transforming Sudanese reality. (Religion is a double-edged sword.)
The SPA and the Sudanese masses believe, and are convinced, that the revolution was not just to remove Omer el Bashir or the Ingaz regime for that matter, but to transform the Sudan’s falsified reality and restore its national dignity. There are even calls for the Sudan to quit the Arab League and return to its African roots, which has received support from the masses. The reaction to the events in the Sudan have been varied, from support for the military Junta coming from the Kingdom of Saudi Arabia, the Emirates and Egypt to outright rejection of the Junta by the African Union (AU). The AU, in its resolution 5 (c) to “freeze Sudan’s participation in its functions if the Military Council does not surrender power to a civilian authority in two weeks from the date of the resolution”, inadvertently supports the SPA.
My reading of the situation is that although the Junta continues to implement the demands of the protesters camped in its headquarters to arrest, incarcerate and confiscate the looted property of the Ingaz figures, nevertheless, they will procrastinate in handing power to the civilian Supreme Council of the State and a civilian cabinet until they are assured of their immunity from prosecution. . It must be viewed that their intervention was to prevent a sharp split in the army and to keep the Ingaz intact. Most of the members of the Military Council were senior officers in the army and security forces whom Bashir appointed recently, ostensibly to protect his back. The Chair of the Military Council, Gen. Burhan, hails from Bashir’s ethnicity, and may be counting on a possible split along ethnic and regional contours to occur within the ranks of the SPA and the protesters to drive a wedge and weaken the protest.
So far, the SPA and the Sudanese people are united in their demand that an Ingaz 2 shall never be allowed, which explains their demand to dismiss from the information and communication industry all those bureaucrats, journalists and news anchors linked to Ingaz 1. The deposed President Omer el Bashir and his two brothers, Ali Osman Mohammed Tah and Dr. Awad el Jaz, and many other Ingaz figures have been incarcerated in Kober Maximum Prison – a positive development and indication that SPA means business.
While time may be running out for the Junta on account of non-recognition and other diplomatic etiquettes, the SPA and the protesters camped in the army headquarters may continue to bask in the support of the Sudanese masses until they succeed to form the Supreme Council of the State – with or without a representative of the Junta – and a Constitutional and Legislative Assembly representing the forces of change, which in turn will elect a Prime Minister, a Deputy Prime Minister and seventeen civilian ministers of impeccable character. It remains a tall order to transform Sudan’s reality after thirty years of Ingaz
The impact of Sudan’s uprisings on South Sudan and the region
Although until recently (2011), South Sudan was an integral part of the Sudan, nevertheless, as I have mentioned above, its people had not completely integrated into the social and political fabric of northern Sudan. The Southern Sudanese invariably (except for small groups of leftist activists) pursued a separatist agenda, and therefore, don’t count themselves part and parcel of the Sudanese nationalist struggle even though they may have participated in the struggle as individuals or as groups. They have, therefore, forfeited their share of the victory. Not only that but they also don’t benefit in terms of acquiring political skills, such as tactics and strategies, in their struggles. This explains why political struggles in southern Sudan then, and now South Sudan, have invariably been violent ethnic conflicts and wars.
Before speaking about the impact of the Sudanese uprisings, it is important to analyse the context of the Horn and the Great Lakes Region in terms of political contacts and flow of ideas, without which it will be practically impossible to gauge the impact of social and political developments in any of the countries on the others in the region.
It is a fact that nationalist movements in the region were fragmented and isolated from each other although there was the overarching Pan-African movement whose objectives were continental liberation. It is obvious the national movements were stronger than the Pan-African movement, whose ideological messages did not permeate traditional, conservative and liberal African political thought. The relations in the region were and remain competitive and conflictual, revolving around inviolability of arbitrary colonial borders. Thus political formations in the region had much on their plates other than solidarity across common borders.
This may explain why important socio-political developments occur without concern, solidarity, or drawing important lessons to be employed locally. Sudanese uprisings did not have much impact on the political party organisation and action in East Africa nor did developments in Aast African countries impact political struggles in the Sudan. For example, the union of Tanzania and Tanganyika did not impact or influence the southern Sudanese desire to pursue secession. The second liberation struggles in Kenya in the 1990s never borrowed a leaf from the Sudanese struggle against Numeri’s totalitarian regime. For instance, it was not enough to remove section 2A from the constitution to relax the struggle against Moi’s totalitarianism
Now times have changed and it is becoming clear that peoples’ struggles and mass movements against dictatorship, personalised rule, and acute economic pauperisation of the masses emanating from the crisis of capitalism in the region at least share some characteristics and must therefore learn from each other in terms of setting strategies and tactics and solidarity with each other. The mass movements in Kenya and Uganda must learn to organise and build solidarity networks and shield them from the repressive security organs of the state, It is important to view a crisis in one sector as part of a crisis in the whole system. The political tool (civil disobedience) in the hands of Sudanese protesters was effective only because all subscribed to the principle of solidarity and all sections of society participated in it at the same time. Mass action in a sector must involve the professionals, the technicians, the workers – otherwise it will not succeed.
Organize Don’t Agonise!!
Winter Is Coming: Why Our National Debt Is Illegitimate, Unjust and Unsustainable…and Why We Should Be Worried
Greece teaches us, if we will listen, that the time is likely to come when Kenya will be unable to pay government workers’ salaries and will not be able to fund essential public services, such as security. At this point, the Government of Kenya will be forced to take on yet more borrowing to prevent a mass uprising. These “rescue packages” will be offered on grossly usurious terms, terms that the government will have no choice but to accept.
Recently the matter of Kenya’s national indebtedness has gained wide coverage in the media, not least in a presidential roundtable with the press on December 28th, 2018. In my opinion, our nation is grossly indebted, and in fact we are in a de facto state of emergency as far as our nation’s finances are concerned. I hope to demonstrate this fact below, and to suggest what options we have for dealing with our indebtedness.
Several indicators for measuring national indebtedness exist, such as Debt-to-Gross Domestic Product (Debt:GDP), debt per capita, etc. Probably the most widely-used indicator is the Debt:GDP ratio. This particular metric is so obfuscatory and misleading that it is not inconceivable that it was actually developed to mask the truth about national indebtedness the world over.
When we as individuals want to borrow salary-backed loans from banks, the banks attempt to assess our ability to pay off these loans by reviewing our payslips, sometimes going back 3 to 6 months. This effort is calculated to answer just one question: what is our take-home pay? In doing this, the banks are assessing our credit-worthiness, which helps to reduce the risk of default.
At the national level, however, this abundance of caution is thrown to the wind. The use of the Debt:GDP ratio to measure national indebtedness means that a country’s ability to take on more debt is assessed on the basis of its GDP. At an individual level, such an assessment would approximate assessing our ability to pay off salary-backed loans based on our gross pay. In fact, it is much worse: it is more like assessing an individual’s ability to pay off a loan based on how much revenue he generates for his employer. Even if such a company is just breaking even, the revenue an employee earns his employer must necessarily exceed his salary, or else that organisation would be unable to meet its operational costs, such as rent, electricity and other office expenses. Put another way, the revenue an employee generates pays a lot more than his salary). Since GDP attempts (poorly) to measure the total value generated by all the economic activity in a nation, to use it as a basis for measuring whether a country has room to borrow is patently unwise simply because not all the value created in a nation’s economy is available to pay a nation’s debt.
The revenue employees generate and the value an economy generates (GDP) are analogous in that both are measures of value created. However, whereas the revenue produced by employees accrues directly to their employers’ GDP, it does not so directly accrue to a nation. For example, after a loaf of bread has been produced in a country, that loaf is not submitted to the government, yet its production adds to the nation’s GDP. For this reason, even a revenue-based definition of employees’ income does not properly approximate the absurdity of using GDP as a measure of national income on which to assess indebtedness because not all of GDP accrues to the nation as income.
By masking true indebtedness, therefore, the Debt:GDP ratio encourages wanton borrowing. This works in favour both of fiscally irresponsible (or worse, corrupt) governments and of predatory lenders…
What is the net effect of all this? The more broadly a lender can define a borrower’s income, the larger the proportion of that borrower’s true income that will flow out as loan repayments, and the more the borrower’s assets stand at risk of repossession as collateral. This is what has happened to us as a nation. When we consider further stratagems like rebasing our GDP, which had the effect of increasing our GDP by 25% at a stroke, it can be seen that by nominally increasing our GDP the illusion was given that our nation was able to take on even more borrowing than before, opening the gates to yet more lending.
By masking true indebtedness, therefore, the Debt:GDP ratio encourages wanton borrowing. This works in favour both of fiscally irresponsible (or worse, corrupt) governments and of predatory lenders, both private and multilateral (the line between private and multilateral lenders is far thinner than is generally believed). We do not pay debt out of GDP. We pay debt out of our national revenues. The more revealing and honest measure would be debt-to-national revenue. For the same reasons of honesty and clarity, it is prudent to narrow the definition of national revenue down further to tax revenue, thereby eliminating grants, donations, monies realised from the sale of public assets, and other incidentals from the discussion.
The problem – from the viewpoint of irresponsible governments and predatory lenders, of course – is that once we do so, the scales will fall off our eyes and it becomes apparent just how much of our nation’s money is going towards servicing our debt. According to the national Treasury, our national debt, which stood at Sh1.894 trillion in the financial year (FY) 2013, had grown to Sh5.047 trillion by the end of FY 2018, a growth of 269 per cent.
In 2013, however, the government collected a total of Sh754.2 billion in taxes. The implication is that our Debt:Tax ratio stood at a whopping 251 per cent in that year. By 2018, although revenue collections had grown to Sh1.47 trillion, our debt had grown much faster, so much so that our Debt:Tax ratio in the FY 2018 stood at 343 per cent.
Our GDP in 2013, according to the same report, was Sh4.496 trillion, meaning our Debt:GDP ratio was 42.1 per cent in 2013. In 2018, our GDP was Sh8.845 trillion. (This suggests that our GDP has been growing at a compounded annual growth rate of 14.49 per cent, which would be news to most Kenyans; the effect of rebasing our GDP can now more clearly be seen.) These figures imply our Debt:GDP ratio in FY 2018 was 57 per cent.
In 2013, however, the government collected a total of Sh754.2 billion in taxes. The implication is that our Debt:Tax ratio stood at a whopping 251 per cent in that year. By 2018, although revenue collections had grown to Sh1.47 trillion, our debt had grown much faster, so much so that our Debt:Tax ratio in the FY 2018 stood at 343 per cent. In other words, if the Government did nothing else but pay off our national debt – if it did not pay teachers, doctors, nurses, the army, and the police; if it did not provide medical supplies; if it bought no textbooks; if it did not construct one metre of road or railway; if it did not construct one hospital room or classroom or police post – it would take us about three and a half years to pay off the national debt.
This situation is untenable. National Treasury data indicates that in FY 2018 we spent Sh459.4 billion servicing our debt. By that measure, debt repayment was the single largest item in our nation’s expenditure, exceeding our expenditure on transport infrastructure (Sh225 billion), health (Sh65.5 billion) or education (Sh415.3 billion). In other words, we are spending more paying off our debt than we are spending providing good transport for our people and good treatment for our sick – combined.
A day of reckoning is soon coming for our beloved country, on which day we shall realise that indeed, as per the Holy Writ, “…the borrower is slave to the lender”, and that debt (even if the money is used well, let alone if it is actively misused as we have done) is the tool of the neo-colonialist. It will become starkly apparent that by a system of multilateral and international debt, there is a sense in which foreign powers have been able to be perhaps as extractive of our nation’s wealth as they were when they were in power as our colonial masters. There is in fact a very real sense in which the colonial powers never really left. The only major change is that China is now on the list of our foreign masters.
We have already seen multilateral lenders like the International Monetary Fund (IMF) force our government to impose VAT on fuel. This is not the first time this happened. In 2013, when our debt was less than half what it is now, the IMF backed changes in our VAT law that would have imposed VAT on milk and medicines, claiming that “…the changes in the law [would] put Kenya in line with other modern VAT regimes in the world by simplifying the way it operates while reducing the number of exempt items.” Although the Cabinet did not impose VAT on milk and medicines, other items, such as textbooks, periodicals and magazines, did not escape the taxman’s levy. The press reported that our national port in Mombasa was used as a security for the loan that was used to construct the Standard Gauge Railway (SGR). These are not isolated bellwethers of the dire situation our country finds herself in: the Daily Nation recently reported that we will require Sh1.04 trillion to service our debt in FY 2020. Where will it come from?
We must now examine possible solutions to what is clearly a monumental problem. The truth is this: debt can be dealt with either by paying it, or by not paying it. National debt can be repaid through austerity programmes and/or by the realisation of collateral. A nation may avoid repayment by pursuing debt forgiveness; defaulting on our sovereign debt; and/or overseeing a managed default on our sovereign debt.
Options for paying our national debt
Since the national debt can only be paid out of taxes, an escalation of the national debt can only result in an austerity programme. Austerity is a term that follows a very well-worn path of giving nasty, anti-common man policies honourable names (this is what is called “Economese”). Simply put, austerity necessitates the redirection of large portions of tax receipts away from normal government expenditure (including mission-critical social expenditure like health and education, and away from development expenditure) in an effort to pay off the debt. The Merriam-Webster dictionary describes austerity as “enforced or extreme economy”.
The fact that Kenya is – whether it has publicly announced it or not – well up the austerity road is evidenced by the earlier observation that debt repayment is the single largest item in our nation’s budget. By the time our lenders and leaders decide to announce that we are in an austerity programme, we will have been in one for years.
To examine where this road leads, we must turn to Greece. That nation has been locked in austerity’s deathly embrace for the better part of a decade. An Al Jazeera article notes that the austerity programme in Greece was occasioned by over-borrowing (sound familiar?) in the years leading up to the global financial crisis, which was exacerbated by a rise in rates occasioned by that crisis. In order to keep paying government salaries and finance public services, Greece had to accept an initial loan of EUR110 billion from its Eurozone partners and the IMF. To pay off this loan, the country was compelled to institute radical austerity measures. How did that go?
The European Union, the European Central Bank and the International Monetary Fund loaned Greece a total of €289bn ($330bn) in three programmes, in 2010, 2012 and 2015.
The economic reforms the creditors demanded in return brought the country to its knees with a quarter of its gross domestic product (GDP) evaporating over eight years and unemployment soaring to more than 27%.
The fundamental contradictions between the envisaged outcomes of austerity and its outcomes in reality are also the reason we find multilateral lenders talking out of both sides of their mouths, first imposing these programmes, and then sheepishly admitting that they have not worked. The IMF, for example, actually produced a report stating that it made notable failures on its first rescue package to Greece.
Greece teaches us, if we will listen, that the time is likely to come when Kenya will be unable to pay government workers’ salaries and will not be able to fund essential public services, such as security. At this point, the Government of Kenya will be forced to take on yet more borrowing to prevent a mass uprising. These “rescue packages” will be offered on grossly usurious terms, terms that the government will have no choice but to accept. Then, in a strange twist of irony, the very people upon whom the initial injustices were visited will do the lenders’ marketing for them by way of a civil uprising. From then on, our nation’s expenditure will be “supervised” by these lenders, not to help the Kenyan people, but to ensure that these lenders are paid. These are doomsday scenarios, and I find it difficult to even write them. Yet it can get worse – and has, elsewhere in the world.
Realisation of collateral
Realisation of collateral is a method of debt payment that is as old and as basic as Shylocks. It is difficult to recall a time when national debt was collateralised to the extent that has happened in the recent past. It appears that the realisation of collateral appears to be the favoured method of China for collecting debt. For our case study on this, we must turn to the nation of Sri Lanka, as the New York Times reported:
Every time Sri Lanka’s president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes.
Yes, though feasibility studies said the port wouldn’t work. Yes, though other frequent lenders like India had refused. Yes, though Sri Lanka’s debt was ballooning rapidly under Mr. Rajapaksa.
…Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December .
There are examples closer to home. In December 2018, the US National Security Advisor, John Bolton, sensationally claimed that China was about to take over the Zambia Electricity Supply Corporation (ZESCO), which is Zambia’s version of Kenya Power & Lighting Company, before KenGen and Ketraco were hived off. Although this rumour was strongly refuted by Zambia’s presidential spokesman, Mr Amos Chanda, Mr Chanda did admit that Zambia owes China US$3.1 billion in debt. In Africa that kind of statement from that kind of person often means the figure is much higher; indeed, some sources have placed the figure at US$6.4 billion.
In 2017, Zambia’s police force had to scrap plans to hire eight Chinese nationals following a public outcry. Zambians were concerned about having to salute a Chinese national in their own country. It is also true that in November 2018 police arrested over 100 residents in Kitwe (the country’s second-largest city) who were protesting the alleged sale of the Zambia Forestry and Forest Industries Corporation (ZAFFICO). There is a possible sub-plot here: Mr Bolton’s claim may mean that the IMF and Western allies are worried that they are losing their grip on the Zambian nation to China.
Options for not paying our national debt
In advocating for the non-payment of national debt I am not advocating injustice or dishonesty for this reason: “The government” is not a nebulous entity separate from the people. The government is the people. When the government borrows, it is the people who are borrowing; when the government pays, it is the people who must pay; indeed, it is their taxes that are used to pay.
As can be seen from the foregoing, over-borrowing, poor governance and/or the mismanagement of public funds can lead to adverse effects, not on “the government”, not on the lenders – even private lenders – but on the people. The stark truth is that austerity rarely, if ever, aids recovery – unless by recovery we mean the recovery of lenders’ money.
As can be seen from the foregoing, over-borrowing, poor governance and/or the mismanagement of public funds can lead to adverse effects, not on “the government”, not on the lenders – even private lenders – but on the people. The stark truth is that austerity rarely, if ever, aids recovery – unless by recovery we mean the recovery of lenders’ money. Austerity is a creditor-oriented policy, not a people-oriented policy, and it fails because cuts in government spending result in reduced consumption, unemployment and lower tax receipts. Yet tax receipts are what are needed in order to pay off the debt. The realisation of collateral (the other solution) is nothing but the seizure of a people’s land
There exists, therefore, a moral case for non-payment, which is this: that the betrayal of a people by its ruling class through the accumulation of a debt whose benefits the people never realised should not be visited upon the class of the ruled, who pay the debt. On this point, therefore, I am advocating for justice, not injustice; and for honesty, not dishonesty.
Debt forgiveness is not a new concept; it is in fact a biblical concept. The concept of Jubilee meant that every 50 years, during the eponymously-named Jubilee year, all debts were written off, all enslavement ended, and everyone was allowed to return to whatever ancestral lands that they might have had to give up because of an inability to pay back debt. A thorough examination of the wisdom and justice of this law would take up a solid chapter in a good book; suffice it to say that it acted like a legislated revolution, resetting the kind of gross national inequalities that US Senator Bernie Sanders is grappling with – for the price of a trumpet blast.
Our gross national indebtedness means – or rather, dictates – that we pursue debt forgiveness, because we simply cannot pay back everything we have borrowed. The problem is that we are not considered a poor country any more – not even a low-income country. We are now a middle income nation, and precedent shows that debt forgiveness is the preserve of highly indebted poor countries. Our pleas for debt forgiveness, therefore, are quite likely to fall on deaf ears. Further, a significant portion of our national debt is owed to China and China, Sri Lanka might whisper, is not a nation one asks for forgiveness.
A note of caution must here be sounded: only 15 or so years ago, Zambia had its debts wiped clean under the IMF’s Heavily Indebted Poor Countries scheme. The same country then took “less than a decade” to run up fresh debt of 59 per cent of GDP, buying million-dollar fire engines and constructing roads twice as expensive as those of her neighbours.
A strategy of debt forgiveness is, therefore, useless in the absence of enforced legislation to ensure that future over-indebtedness and/or wastage is prevented. A law preventing the government from tying up more than 10 per cent to 15 per cent of the average tax collected in the previous five years on debt servicing would be a very good place to start. The laws preventing wastage and theft of what we actually do borrow do exist, but require radical enforcement.
Default on sovereign debt
There exist exceptional circumstances in which nations default on their national debt. These times are usually presaged by significant external shocks or political ones, such as when Fidel Castro took over in Cuba in 1959, and simply defaulted on outstanding Cuban debt. The bonds on which he defaulted are in default to date.
Reference is often made to the Argentinian default (and one must be specific) of 2001. In 1998, Argentina’s economy entered a deep recession. The IMF’s by now predictable solution, of course, was austerity. Over the course of the following two years, it became increasingly clear that the toxic mix of an artificially fixed exchange rate, a steadily worsening balance of payments deficit (imports exceeding exports) and mounting debt, among other factors, meant that Argentina would never be able to pay off its debt.
Then the people began to protest, with increasing vociferousness, against austerity. When in December 2001 the IMF realised that default could not be avoided, it held back previously promised “support” so that the government was left without any external funding. Bank runs and riots followed: at one point the country had five presidents in ten days. Finally, on December 24, the country defaulted on a US$ 100 billion debt. This led to a social crisis of epic proportions, characterised not least by rampant unemployment.
Sovereign defaults of this nature tend to be devastating and ought to be avoided. The social cost ends up being far too high, even if one is a Castro leading a non-conformist Cuba. Firstly, in order to teach other would-be defaulters a lesson, lenders make an example out of one. Secondly, the world has become too interconnected for us to make ourselves a pariah state for any length of time: globalisation is a source of many ills, but it can help us as well, for we have a surplus of labour that we can offer the world (among other competitive advantages).
Managed default on sovereign debt
The way we might want to do it is the way Ecuador did it between 2007 and 2009. The then President Rafael Correa stopped payments on bonds that the country had taken out, and established a “debt audit commission” to conduct an audit on the country’s debt, which at the time was using up 38 per cent of the government’s budget. The purpose of this audit was to establish the “legitimacy” of the debt.
This was a brilliant first step. Firstly, it brought to the forefront the moral injustice of a people’s having to pay loans from which they never benefitted. Secondly, the reason given for the initial default was a moral one, as opposed to a financial one (even though the financial reasons lurk menacingly in the background). The genius behind the debt audit was that it was for establishing the morality (and not merely the affordability) of the public debt. Such a debt audit commission in Kenya – objective, apolitical (in a local sense), staffed with technically qualified, patriotic individuals and with an ability to trace the flows of borrowed funds – would likely produce spectacular results.
The way we might want to do it is the way Ecuador did it between 2007 and 2009. The then President Rafael Correa stopped payments on bonds that the country had taken out, and established a “debt audit commission” to conduct an audit on the country’s debt, which at the time was using up 38 per cent of the government’s budget. The purpose of this audit was to establish the “legitimacy” of the debt.
Ecuador’s debt audit commission found that the debt was illegitimate based on the manner in which negotiations were conducted. (The reasons for which debt can be illegitimate are myriad: here in Kenya, the factors would range from non-existence of the assets ostensibly purchased with the debt, overpricing of assets that do exist, payment of bribes and kickbacks, and lack of public participation and parliamentary approval, etc.) Arising from the stopped payments, and from the public establishment of the illegitimacy of the debt, the value of the bonds on the open market plunged. The Government of Ecuador then tendered to repurchase the bonds at 30 cents on the dollar. On the basis of the auction results, the government then offered to buy back the bonds at 35 cents on the dollar, expecting to retire at least 75 per cent of the bonds. Ninety-one per cent of the bonds were so retired in June 2009, that the government paid off its public debt for about a third of what it was worth and, according to President Correa, saved US$ 300M (Sh30 billion) per year in interest payments.
The Ecuadorian solution has an elegance that only simplicity gives. However, its success needs to be assessed against the backdrop of an important contextual factor: the retirement of the country’s debt happened at a time when markets were in the throes of the global financial crisis. Investors, therefore, were under pressure to liquidate their assets. Further, how successful this method would be as regards Chinese debt is anyone’s guess: simple and easy are vastly different things.
That said, the process presents a blueprint for any government that is ready and willing to ease the burden of over-indebtedness and is an option and a strategy this country should pursue – before it’s too late.
Rafael Marques de Morais: “For Press Freedom, I Have Had to Fight to Free the Angolan People from Fear”
Interview of Rafael Marques de Morais, prominent political activist, winner of numerous journalistic prizes and awards, and founder of Maka Angola, an anti-corruption watchdog focusing on social injustice in Angola.
Rafael Marques de Morais has something that defines his whole life: the Civil Courage Prize, which recognises his “steadfast resistance to evil at great personal risk”. Rafael is a journalist and political activist from Angola, fighting government corruption through his online watchdog Maka Angola and the Makaleaks whistleblower platform.
To understand the world of corruption in which Marques lives, he tells us about his last investigation: “A former provincial governor diverted the funds to build schools and a hospital in a rather depressed community, and instead built his own private luxury lodge to welcome foreign hunters to hunt lions and elephants”.
Between 1999 and 2002, Marques de Morais wrote a serie of articles about the diamond trade which gave birth to the book “Blood Diamonds: Corruption and Torture in Angola”. According to the Wikipedia, the articles “described the killing and terrorizing of villagers by private security companies and Angolan military officials in the name of protecting mining operations”. In November 2011 the journalist issued a criminal complaint accusing nine Angolan generals of crimes against humanity in connection with diamond mining. This is Marques style. His fight is against fear: “For there to be press freedom, people must speak freely, without fear. So, I have had to fight to help free the Angolan people from the shackles of fear as well. Otherwise, journalism is like building a sand castle near a high tide”.
“On my first trial, in 2000, the two female assistant judges came to whisper to my ear that they were praying for me”
This means becoming an activist: “I have forged my skills under a dictatorship, and there was no way I could just do journalism. I have had to defend and fight for the very space to fulfill my duties as a professional and as a citizen”. Now, he says, we see even in the United States that “many media outlets and journalists are getting bolder, and being activists, as President Trump accuses them of being the “enemies of the people”.
Marques de Morais is proud to have never fought alone: “On my first trial, in 2000, the two female assistant judges came to whisper to my ear that they were praying for me, and wished me Godspeed strength”. He had been left with no lawyer, no witness, in a trial held in camera for calling the President Dos Santos corrupt and a dictator. “But I was not alone, I had the two assistant judges giving me strength. It is the first time I share this story”, he states.
Marques doesn’t remember how many times he’s been in prison: “I lost count. The longest I stayed in prison was for 43 or 44 days, but I have been briefly detained many times”. Once, he was arrested while going to buy tomatoes for a salad: “I saw a Swiss human rights researcher being chased by some militias. I stopped to help her, and then I ended up at the police station with my tomatoes in the car”, he says.
Another time, a friend asked him to accompany him to buy fish, early in the morning. Without them knowing it, the police had destroyed tens of fishermen’s huts and houses and forcibly removed the people and dumped them out of the city: “Needless to say, I was blamed as the agitator by the police and briefly held”, Marques asserts.
In 2013, he went to cover the trial of young protesters. He was interviewing them outside the court when “54 special police forces besieged us with machine guns and all the anti-riot gear, and an armored car. We were taken to the Rapid Intervention Police were some of us were tortured and taunted with death threats”. All the action was filmed by a camerawoman because, according Marques, “the regime’s hatred for me inspired them to film my beating”.
He has “a lot of kasfkaesque stories to write about one day, including ambushes”, but he has never surrendered. In 2009 he launched Maka Angola to publish the material he had in excess for his dissertation at Oxford University on “The Transparency of Looting” in Angola. “I wanted to share all the information I had gathered”, he says, as the great journalist he is.
Qurium has been hosting Maka Angola and Maka Leaks since 2016. Maka Angola had received many cyberattacks since he joined Virtualroad, by a colleague’s recommendation: “Every since I have had a peace of mind, for it has become a great line of defence against cyber attacks and I have not been bothered by a single attack since Virtualroad became Makaangola’s host”, he says.
Does Marques de Morais think the Internet is a good or a bad tool for journalists? “It’s only a tool, it all depends on the strength of the journalists who use it for good journalism, vis-à-vis the armies of trolls at the service of authoritarian regimes, and the mushrooming industry of online disinformation”. We’re sure which side is he on.
In 2018 the International Press Institute awarded Rafael Marques de Morais with the World Press Freedom Hero prize
This article was originally published by Qurium. Read the original article.
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