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DIVIDENDS, DEFICITS, AND DEVELOPMENT: Can Kenyan Millennials Ride the Demographic Wave?

Falling fertility and mortality rates have put Kenya in line to reap the same demographic dividend that powered the rise of the Asian Tigers – but only if it gets its social and economic policies right. By PAUL GOLDSMITH

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DIVIDENDS, DEFICITS, AND DEVELOPMENT: Can Kenyan Millennials Ride The Demographic Wave?
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The population surge now taking place across sub-Saharan Africa is this continent’s equivalent of the Western post-war Baby Boom. The congruence with demographic transitions elsewhere suggests that in theory, Africa’s “Baby Boomer” millennials are well positioned to affect a radical transformation. The case for a generational social movement intersects Kenya’s potential for a demographic dividend similar to the one underpinning the rapid rise of the Asian Tigers.

Two thousand years ago, Africans comprised an estimated 12 to 15 per cent of the world’s population. Africa’s share had dropped to 9 per cent by 1500 AD. By the end of the 19th century, the export of African slaves to the Americas and environmental calamities contributed to its decline to 6 per cent. Initial conditions, including the continent’s low population densities, physical and spatial barriers to communication, and historical isolation from other world regions, made it vulnerable to European exploitation.

Africa’s population began catching up during the decades of colonial rule, and spiked after independence. The continent’s share of the world’s population reached 17 per cent in 2017, and Africa is projected to host over a quarter of the world’s people by 2050. Naturally, the exceptionally high growth rates of the past several decades pose some formidable developmental challenges for Kenya and for the many other African nations with similar demographics.

Fewer births each year results in a country’s young dependent population decreasing relative to the working-age population. With fewer people to support, a country has a window of opportunity for rapid economic growth, but only if it gets its social and economic policies right. The decline in fertility, albeit slower than was the case in Asia, should exert a similar effect on African countries.

Kenya’s population has been surging since independence, growing from 8 million in 1960 to 13 million in 1975, and doubling to 26 million in 1995. These numbers confirm the fact that all the generations of Kenyans alive today were “Baby Boomers” when they came of age. The result is a population pyramid that over time has more in common with Mt. Kenya than with Mt. Kilimanjaro.

Since the colonial era, Kenya’s lopsided population distribution, where over 80 per cent of the population is concentrated in the 23 per cent of high potential land, has combined with the threat of environmental degradation to provoke Malthusian predictions of impending calamity. During the 1990s, urbanisation and the numbers of new university graduates entering the economy provoked a new set of concerns.

Kenya’s population has been surging since independence, growing from 8 million in 1960 to 13 million in 1975, and doubling to 26 million in 1995. These numbers confirm the fact that all the generations of Kenyans alive today were “Baby Boomers” when they came of age. The result is a population pyramid that over time has more in common with Mt. Kenya than with Mt. Kilimanjaro.

In 1998, I reviewed an internal US State Department analysis of the problem that outlined three future scenarios for Kenya: economic take-off; collapse; and muddling through. Where the document highlighted the prospects for political instability in the future if the then Moi regime of public mismanagement and political corruption were to persist, I opined that Kenyans were a resilient people who would somehow manage as long as the rains were okay.

This proved to be true. The rise in annual GDP growth during the following years may have partially offset the spreading rot, but the large numbers of educated youth entering the work force exposed the unsatisfactory state of affairs, as the accounts of urban millennials published in The Elephant over the last two months have shown.

Demographic dividends and deficits

Population growth in the form of natural increase and mass migration is one of the primary forces of historical change. However, demographic structure is acknowledged to be the more important indicator for developmental policy. The latest population numbers for Kenya provide the quantitative parameters of the country’s shifting generational balance.

Kenya Population Structure, 2017

Kenya Population Structure, 2017

Source:  CIA World Factbook

The backlash against the elders highlighted in many of the Elephant’s Millennial Edition is tempered by their relative scarcity. The elderly – people over the age of 65 – now comprise only three per cent of Kenya’s 48 million population. The 25-54 age group’s current share of the population is now one-third larger than it was in 1975.

One notices the difference conveyed by these statistics as soon as you step off the plane almost anywhere in the northern hemisphere. America’s retiring Baby Boomers, for example, are 16 per cent of the U.S. population. In South Korea, so often cited to underscore the two countries’ diverging economic pathways over the past several decades, the figure is 13.5 per cent. The world’s estimated average is edging towards 10 per cent and growing; the trend will translate into a global reduction in household savings and returns on financial assets. This will reduce the growth of household wealth from the historical mean of 4.5 per cent to 1.3 per cent over the next two decades, according to research on global demographic trends.

These numbers qualify the demographic dividend David Ndii referred to in his contribution to the discourse. Formally defined, the demographic dividend is the accelerated economic growth assisted by a decline in a country’s mortality and fertility and the shift in the age structure of the population. This dividend can be activated when pro-human capital policies combined with a large working-age population create virtuous cycles of wealth creation.

The dividend accounted for an estimated two-fifths of the Asian economic miracle. Now it may be Africa’s turn. Population numbers are moving in this direction, but there are basic prerequisites that must be in place for it to happen. Flexible labour markets, quality education systems and health services, and outward-looking economic policies are conventional elements of the formula.

Kenya’s formal policy framework meets most of the criteria. Despite the slower than expected fertility rate decline, Kenya’s dependency ratio is hovering between 76 per cent and 80 per cent. This means one working individual currently supports up to four dependents, but the ratio will decline, bringing Kenya in the rank of countries expected to reap the dividend. But there is no guarantee that this will happen, as the dividend is time-bound. The equation has real and potential implications for millennials, especially considering that important economic indicators, such as investments and savings, are trending in the opposite direction.

The demographic surge raises the stakes for getting policy right. In the case of Latin America, weak governments and closed economies saw large areas forfeit their dividend during the years between 1965 and 1985. Comparative analysis indicates the interactive effect of policy and demography accounts for 50 per cent of the growth gap between Latin America and East Asia. The corresponding observations about demographic deficits, or the failure to maintain living standards due to population decline or other systemic inefficiencies, underscore the imperative of getting the long-term policy equation right.

The demographic surge raises the stakes for getting policy right. In the case of Latin America, weak governments and closed economies saw large areas forfeit their dividend during the years between 1965 and 1985.

Japan and Europe are now going through the decline phase of their demographic transition. Socio-economic change diminishing the role of extended families and other social mechanisms exacerbates the problem, requiring that the state enact effective social policies to bridge the gap. Although post-war Japan maximised its dividend, it is still having problems coping with a population that is shrinking and aging at the same time. Despite its sustained economic growth, almost half of South Korea’s citizens aged over 65 now live in relative poverty, defined in this case as earning 50 per cent or less of median household income. High levels of isolation and depression have led to a dramatic rise in suicide among the elderly, from 34 per 100,000 people in 2000 to 72 per 100,000 people in 2010.

The United States, in contrast, has traditionally relied on immigration to maintain its working-age population. This has countered the aging variable while sustaining a major source of socio-economic revitalisation in the form of new blood and cultural diversity. The noise from President Donald Trump and his base conflicts with the fact that the 75 per cent of Americans support immigration, and they report that the diversity of immigrants makes the country a better place. The country has systematically capitalised on this multicultural dividend to rejuvenate the population and refresh its economy throughout its history. Present controversies over uncontrolled immigration and refugee influxes camouflage the fact that Europe has lately been following a similar – though undeclared – policy pathway.

Demographic transitions typically involve a large jump in population followed by a steady decline as investment in fewer children replaces the risk-spreading and agricultural labour function of large families. In Kenya, where the fertility rate remained in the mid-3 per cent range until the last decade, perhaps the prolonged transition to “adulating” lamented in some of the millennials’ accounts may hasten the fertility rate to drop to the replacement level of 2.1 children per woman from the 2.7 of the past decade.

The employment numbers indicate that the process of reaping the dividend here is less linear and subject to the distinctive features of Kenya’s geography and domestic politically economy. The median age in Kenya is now 19, and Kenya’s 39 per cent overall unemployment rate translates into 22 per cent for youth. The numbers for neighbouring countries are much lower: 4.1 per cent for Uganda; 5.2 per cent for Tanzania; and 3.1 per cent for Rwanda. Even Nigeria, Africa’s most populous country, has a significantly-below-Kenya youth unemployment rate of 13 per cent.

Even though we should not accept all these economic numbers at face value (the less visible parallel economy that doesn’t show up in official statistics is an important source of informal sector livelihoods in Kenya), we may be facing the politically explosive demographic overload scenario that was detailed in the State Department study twenty years ago.

The median age in Kenya is now 19, and Kenya’s 39 per cent overall unemployment rate translates into 22 per cent for youth. The numbers for neighbouring countries are much lower: 4.1 per cent for Uganda; 5.2 per cent for Tanzania; and 3.1 per cent for Rwanda. Even Nigeria, Africa’s most populous country, has a significantly-below-Kenya youth unemployment rate of 13 per cent.

The demographic dividend has a finite window; it does not occur automatically. Both the policies and their timing are critical, which is why Kenya’s millennials are facing a two-pronged dilemma: unemployment is high yet some 47 per cent of the Kenyans sampled in a 2014 Pew Research Survey reported that aging is a major problem. The figures for populous Nigeria, crowded Egypt, and middle-income South Africa came in at 28 per cent, 23 per cent, and 39 per cent in comparison, respectively.

These factors raise the stakes for Kenya getting things right now. But there is more at the crux of the debate than economic policy and warm bodies. Technological innovation works with population increase to drive human adaptation, and developments are moving rapidly on this front.

The fast-moving advance of the fourth technological revolution suggests that Kenya and its neighbours in Rwanda and Ethiopia have the potential to jump the queue if they position themselves properly for the longer run. Negative implications of artificial intelligence for the future of work should not distract us from the benefits on the horizon. The technology sector and building the industrial Internet may serve the same role that manufacturing did in Asia, although the potential for the same demo-techno double dividend cannot be taken for granted.

Assessments of African economic trends now argue that Africa is not likely to transit through the phase of manufacturing and carbon-driven energy generation that powered the post-World War II rise of East Asia and other world regions. Fourth generation technologies, in contrast, can generate an equivalent rise in prosperity and economic growth. This will come about through their contribution to everyday economic domains like health care, resource management and precision agriculture. Digital platforms are already creating a new small-scale ecosystem for commodity marketing, financial inclusion, and women’s empowerment according to one Kenyan expert.

The potential for tech-driven growth will require more than the tech hubs being established in Africa’s tech-friendly countries. It requires the kind of unorthodox and often irreverent problem-solving mindset that the country’s education system is adept at quashing.

The dynamic relationships linking scientific research, applied technology, and venture capital are critical to contemporary processes of innovation. This requires an enabling cultural environment, as demonstrated by the rise of American tech hotspots in the San Francisco Bay area, North Carolina’s research triangle, and the northeastern corridor. These hotspots were not planned; rather, the presence of top research universities and a culture of critical thinking and entrepreneurial risk-taking enabled their rise to prominence over the past three decades.

Kenya’s economy was building towards a transformational tipping point before events saw the country drift into a nebulous purgatory of ethnic polarities and failed constitutionalism. Now deficit financing of infrastructural projects and massive corruption are continuing to remove from circulation critical resources that could be energising the younger generations’ pent-up human capital.

The future availability of such investment capital cannot be taken for granted. It may decline apace with the industrial world’s demographic deficit over coming decades. Then again, demographic trends and the historian John Illife’s treatise on The Emergence of African Capitalism suggest that the continent just may step into the gap. (This was in 1981.) The importance of this synergetic union of capital and labour happening now extend beyond the African continent due to the significance of Africa’s expanding share of the world’s economically active population for the world economy.

Kenya’s economy was building towards a transformational tipping point before events saw the country drift into a nebulous purgatory of ethnic polarities and failed constitutionalism. Now deficit financing of infrastructural projects and massive corruption are continuing to remove from circulation critical resources that could be energising the younger generations’ pent-up human capital.

Beyond demography and economic policy

The first thing that strikes me when I get off the plane back in Kenya is the high level of activity almost everywhere one looks. The country is bursting with energy, but some of it is misdirected and much of it is generating low per capita returns.

The former World Bank head for Kenya, Apurva Sanghi, attributes the mismatch between job requirements and the shortfall of skilled labour due to the poor quality of education. This mismatch clashes with the millennials’ claims about their high level of education. The dramatic growth in universities in Kenya saw quantity replacing quality and the acquisition of paper qualifications displacing the search for knowledge. The commercialisation of higher education has in effect been another drain on the economy that has deprived a large segment of the millennial generation of the skills commensurate with their degrees and diplomas.

The more one studies the data, the more muddled the already uncertain big picture becomes. Even so, the long-term fundamentals, including the country’s 5 per cent per annum growth rates, are at best just okay.

As the latest World Bank overview for Kenya states, Kenya has the potential to be one of Africa’s success stories. All the country has to do is address “the challenges of poverty, inequality, governance, the skills gap between market requirements and the education curriculum, climate change, low investment and low firm productivity in order to achieve rapid, sustained growth rates that will transform lives of ordinary citizens.”

This is a very tall order and until this happens the country will continue to face the risk of stagnation and a creeping demographic deficit. The clock is ticking. In any event, the country needs more than the population-based dividend to drive its transformation. Assuming that demographic growth and the right policies do account for up to 40 cent of the Asian economic miracle, where did the other 60 per cent come from?

Japan and the Asian Tiger nations achieved their reputation through rapid growth compacted within the space of several decades. The demographic dividend is the central component in the developmental mantra explaining East Asia’s remarkable transition. The dividend was activated by policies that combined agricultural commercialisation, liberalisation and the relaxing of state controls, fostering a combination of domestic industry and export-led growth with favourable international economic conditions.

South Korea, the most popular exemplar for other developing countries, implemented deliberate population policies and pragmatic economic guidelines that helped create an age structure facilitating its rapid transition from an agrarian to an industrial society during the short interval between 1960 and 1990. The mutually reinforcing economic and population policies resulted in a basic shift at the household level, with changes in women’s roles and the rise of a middle class in place of the formerly dominant land-owning aristocracy.

The Asian exemplars counteracted the influence of Malthusian assumptions on post-independence developmental thinking, and now the Chinese model figures prominently in the calculations of many African political decision-makers. The Lamu Port, South Sudan, Ethiopia Transport Corridor (LAPSSET) project is emblematic of the focus on large infrastructure projects, natural resource exports, and extractive industries. The proposed Konza Technology City is another worthy but flawed project representative of the central command approach. The coders, investors, nerds, and hackers are not thrilled about moving to a corporate complex in the hinterland in the tradition of sparsely inhabited cityscapes like Brasilia, Morogoro, and China’s Xiongan megacity.

Asia’s big blueprint approaches were consistent with the central planning tradition and Confucian ideologies of social harmony that justified past South Korean and present Chinese and North Korean dictatorships. But there was nothing particularly harmonious about the Asian developmental processes that grew out of the region’s intense internal and territorial struggles, all of which reflected the zero-sum stakes of the era’s ideological conflicts. The triumph of capitalism in that region was anointed with blood, napalm, and genocidal pogroms. The success of the Asian Tigers was the culmination of a long fight that began with imperialism and led to new policies midwifed by fierce competition within old societies sharing similar environmental settings and socio-economic constraints.

Africa’s distinctive features, however, contrast with the conditions underpinning the Asian developmental orthodoxy. In the case of Kenya, competition between communities and opposition to the state prevail whereas in Asia competition and conflict were over ideology and economic models. Growing local opposition to centrally-planned projects in places like Turkana, Isiolo, and Lamu is indicative of the kind of political and social obstacles now complicating the next phase of the proverbial way forward.

Milk, as the pastoralists’ blockade of the road to Lodwar indicates, is still thicker than oil in the Horn of Africa.

It is interesting that the Marxist planners of the superpower era in Eastern Europe saw artificial intelligence as the natural ally of socialist development. AI may still prove to be an antidote to the inequities promoted by neoliberal capitalism. Where Western advisors stressed population control, their socialist counterparts in Africa saw population growth as integral to the continent reclaiming its position on the world stage. The prospects of this happening over the next several decades reminds us that Marx was one of the few analysts to critique the natural laws of Malthus when he postulated that each society at each point in history has its own laws that determine the consequences of population growth.

In traditional African systems, these laws often reflected the dynamics of generational succession. The cultural emphasis on the wisdom of the elders supported their embedded cross-generational influence on decision-making. I witnessed negative examples of this tradition in my children’s schools, where on more than one occasion, I lost arguments with fellow parents over issues like setting up computer labs and Internet connections. Kenya’s fossilised education system is one of the culprits responsible for the under-35ers’ angst, and this is corroborated by another recent essay on the multidimensional crisis plaguing higher education, published in The Elephant.

Has the generational model of African development hit a wall? The unproductive transfer of generational assets that formerly sustained capital formation is undermining productivity in the highland areas that fueled Kenya’s post-independence prosperity. When parents die they bequeath their wealth to their children, and this powered economic growth and diversification in the past. This vector is now turning family farms into dead capital as the owners age and their children working outside the sector block the sale of family land. The widespread leasing of small acreages and the break-up of large farms into parcels for rent is one symptom of a malaise that impacts beyond the agricultural sector.

 

The economic planners that once fostered Kenya’s economic growth have morphed into bureaucrats trapped in the development administration contradiction Bernard Schaffer identified in 1969. Schaffer argued that the first imperative of state administrators is to conserve and protect their bureaucracies while “development” is essentially an entrepreneurial activity. Kenya’s cartels and tenderpreneurs offer proof of the term’s oxymoronic logic.

 

Everywhere the millennials look they see dead ends, or so it seems from the urban point of view. Ndii’s “Hustler Nation essay argues that multiple productivity enhancing interventions in rural areas will generate far more to youth employment and productivity than the mega project revenue vampires they have conjured up. The resources allocated to building a tech city, for example, would be better invested in interdisciplinary IT programmes hosted by universities across the country, and other nodes dedicated to addressing economic activities ripe for innovation.

Everywhere the millennials look they see dead ends, or so it seems from the urban point of view. Ndii’s “Hustler Nation” essay argues that multiple productivity enhancing interventions in rural areas will generate far more to youth employment and productivity than the mega project revenue vampires they have conjured up.

These are the kind of issues that the millennial generation intellectuals and activists would do well to explore and debate. Their future, if not present welfare, will likely depend on developing creative developmental formulae consistent with the region’s historical trajectory and distinctive socio-cultural variation. A shift in this direction is beginning to gather speed on the county level, where the stakeholders are much better situated to generate the adaptive policies needed to maximise the demographic dividend.

In any event, we now know that progress is more a function of trial and error than the strategic planning processes and interventions managed by actors who remain insulated from their failures and unintended consequences. Devolution generates local initiatives, like the Makueni County public health revolution, which can be replicated and tweaked to fit the conditions in other settings.

Considering the obsession with branding of almost every Kenyan enterprise, with its vision and mission statements, more expansive thinking on these issues is one area where The Elephant’s Millennial Edition articles came up short. But they are not, as David Ndii contended, “on their own”. In addition to their rural age-mates, there is a growing transnational movement out there that is beginning to coalesce into a mass generational movement.

I hope it happens. Africa does need to regain its rightful place in the world, and someone needs to rescue the species from the Trumpian values of late capitalism.

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Mr. Goldsmith is an American researcher and writer who has lived in Kenya for over 40 years.

Politics

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.

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Sudan’s (Non-)Arab Spring: Lessons from the April 2019 and Other Uprisings
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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!!

Aluta continua!!

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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.

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Winter Is Coming: Why Our National Debt Is Illegitimate, Unjust and Unsustainable…and Why We Should Be Worried
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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.

Table 1: Kenya's Debt:GDP vs Debt:Tax ratio, FYs 2013 - 2018

Table 1: Kenya’s Debt:GDP vs Debt:Tax ratio, FYs 2013 – 2018

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

Austerity programmes

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?

In August 2018, the Guardian summarized Greece’s experience thus:

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 [2017].

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

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.

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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.

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Rafael Marques de Morais: “For Press Freedom, I Have Had to Fight to Free the Angolan People from Fear”
Rafael Marques de Morais
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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.

Author: Barbican C. Alex Brenner

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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