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Jubinomics in an Era of Austerity: Will the New VAT on Fuel Lead to an Economic Crisis?

11 min read. The increased taxation of fuel is making life harder for Kenyans and is neither good politics nor wise leadership. By DAUTI KAHURA

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JUBINOMICS IN AN ERA OF AUSTERITY: Will the new VAT on fuel lead to an economic crisis?
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Three weeks ago, at the Karen bus stop opposite the Karen Police Station, there was a face-off that pitted passengers against matatu crews and their surrogates, the freelance touts that hang around such stops soliciting for passengers. The 33-seater matatus headed to Ngong town, 10km from Karen, were charging Sh80. Just a couple of weeks ago, the standard fare was Sh30. Occasionally, if the demand outstripped supply, which happens from time to time in the matatu industry, the fare would go up by Sh10. Any increase in fare exceeding Sh40 for the 10km ride, whatever the circumstance, would be considered exorbitant. The passengers won this round, but the lingering problem of arbitrary and surreptitious increases in transport fare had not been solved.

The Nairobi-Karen-Ngong route is a microcosm of the looming confrontation between passengers and matatus. And Karen town could be the flashpoint. The route is a very lucrative one, especially during peak hours. Most of the matatu passengers on this route work in the many church institutions, mega malls, restaurants, schools and universities and a big hospital that are located in Karen. Some work for the wealthy Kenyans who have homes there. There are also a lot of casual labourers working in Karen for whom every penny counts.

The tension that had been building between the passengers and the matatu crews had been palpable: “Hawa wathii siku moja watachoma hizi matatu, hii hasira yao ni mbaya sana,” (“These passengers will torch these matatus one of these days, their anger is real”) said a matatu driver. Wary of the people’s wrath, the matatu crews wait for the people to board the matatu, then ambush and cajole them with the ridiculous fare increase. But a fortnight ago, the people refused to enter the matatus, until the crew members publicly announced the fare they were charging. After a 30-minute stalemate, the matatu crew eventually lowered the fare to Sh100. “Lakini bado hawa wathii wananung’unika, sasa sijui wanataka tufanye nini.” (“Even after giving them a fairer price, the people are still grumbling, I don’t know what they expect us to do.”)

Since September 1, 2018, when the new 16 per cent VAT (value added tax) on fuel took effect, there has been a commotion in the public transport industry. The Karen-Ngong town driver who said that angry passengers may one of these days burn down matatus to protest against what they consider to be unfair matatu fares, was voicing a concern that has in the past few weeks put matatu crews on edge. “Wathii wanateta sana, wengine wanataka tu guoko na sisi…si kupoa,” said a matatu driver operating on the Nairobi-Limuru town route. (“Passengers are really complaining, some are picking fights with us…it is not a good sign.”)

Since September 1, 2018, when the new 16 per cent VAT (value added tax) on fuel took effect, there has been a commotion in the public transport industry. The Karen-Ngong town driver who said that angry passengers may one of these days burn down matatus to protest against what they consider to be unfair matatu fares, was voicing a concern that has in the past few weeks put matatu crews on edge.

The Karen-Ngong driver who was edgy about passengers’ uneasiness with the hiked fares said that he was struggling to remit the Sh8,000 his boss demands at the end of each day. “On several instances, we’ve had to forego our own pay. At Sh115 a litre, the diesel has become way too expensive. We asked the matatu owner to stabilize his profit to Sh7,000, with the hope of balancing the books, at the end of every day but it is not working. I think some people have cut their reliance on matatus. This has a direct relation with frequency of the roundtrips we make – the fewer the roundtrips, the lesser the money we make.”

The matatu cooperatives (Saccos) in Nairobi are in a quandary: they have been mulling (even before the fuel tax increase) over how to “rationalise their increasing costs of operations without being seen as gleeful and uncaring,” said a top brass at the Matatu Owners Association (MOA). “The business is really hurting, but so are our customers, yet, somebody has to carry the load and feel the pain. Unfortunately, it has always to be the consumer.”

But the Saccos have been hesitant: They are afraid of pushing too hard lest their customers rebel and spark off a wave of street demonstrations. Conversely, the industry is undergoing one of its most trying times in recent times – dwindling fortunes occasioned by a gloomy economic outlook. “How long can they hold on like this? That is the Saccos’ bosses’ question,” said the MOA official.

In a bizarre incident on September 16, a matatu stopped at Corporation stage (that is before Uthiru on the Nairobi-Nakuru highway) to pick passengers to Nairobi. Before the driver could know what was going on, a chap grabbed the matatu keys, scaled the dividing wall of the dual carriageway and ran off with keys. The people milling around the stage seemed unperturbed by the incident and the passengers inside and outside the matatu did not seem to mind the ordeal. Afterwards, when I asked one of the freelance touts why the fellow (who is very well known around the area), was risking his life snatching keys from a matatu, his answer was: “Hizi mathree zinaumiza watu sana.” (“These matatus are squeezing people financially.”)

The matatus operating along long distances are not faring any better. My driver friend who operates a Nairobi-Nyahururu shuttle has been mourning since VAT on fuel was introduced. “I’m now spending Sh5,000 on fuel to and from Nyahururu, up from Sh3,200. Nyahururu is exactly 200km from Nairobi city centre. I used to charge my passengers Sh350 one way from Nairobi to Nyahururu before the fuel increase and I’d still take home between Sh3,200 and Sh3,500. It was reasonable.”

After September 1, he increased the fare to Sh400, but this has not helped. “Ndiraruta wira wa kuhura mai na ndiri.” (“I’ve resorted to pounding water in a mortar – in short, I’m doing zero work.”) Even after increasing the fare by Sh50 per person, the best he can take home at the end of the day, he told me, was Sh3,400, after deducting his expenses. As it is, his transport business was running on a Sh1,800 deficit every day – courtesy of the fuel tax. “I can’t dare push the fare more than Sh400: I know my customers, they are also suffering, we’ve to wait and hope President Uhuru will lower the prices,” said the driver nonchalantly.

The journey to Nyahururu is usually a one-way trip: A shuttle leaves Nairobi for Nyahururu in the morning at around 9.00am. The 200km trip usually takes about four hours. If the shuttle is lucky, it will make the return trip to Nairobi by between 5.00pm and 6.00pm, arriving in Nairobi at around 10.00pm. There are between 240 and 260 14-seater shuttles on the Nairobi-Nyahururu route. “If you make the round trip,” said my driver friend, “you count yourself lucky.”

His prayer about President Uhuru rescinding the implementation of VAT on the fuel sounded half-hearted and without conviction – like a person who already knows it is impossible but hopes for the unexpected to happen. “The truth of the matter,” he opined, “is that even if the fuel levy was dropped entirely, there certainly would be some relief, but life as it is, is already tough. Too much money had been stolen under President Uhuru’s watch and that is the price we’ve to pay for the profligacy.” But it has become increasingly difficult to hold a discussion on President Uhuru Kenyatta’s performance, especially with Jubilee supporters, like my driver friend. “Nitutigane na uhoro ucio.” (“Let’s just leave that topic alone.”)

President Kenyatta’s recent fulmination against matatu owners increasing fares, lest their licenses are revoked by National Transport and Safety Authority (NTSA) was rebutted by MOA, which argued the threat had no basis in law. “The President,” said a Jubilee Party MP, “will soon realise that nobody will be taking his threats any more seriously. He is a lame duck president who is doing his final term and holds no sway whatsoever on the politics of the future.”

The imposition of VAT on fuel has had an inflationary effect on practically every commodity that must be transported from point A to point B. In effect, this means that soon almost every household item will become more expensive.

On 20 September, the controversial Finance Bill, 2018 was passed by MPs. And without wasting any time, the President assented to the Bill the following day. The Bill’s vote in Parliament had been preceded by a little-nested game between the MPs and the President. The Parliamentarians had already threatened to shoot down Uhuru’s proposal to halve the VAT to 8 per cent, maintaining that there should be none placed on fuel and defying party chief whips.

The imposition of VAT on fuel has had an inflationary effect on practically every commodity that must be transported from point A to point B. In effect, this means that soon almost every household item will become more expensive.

“I’m afraid to tell you that even with that seeming reprieve, nothing much will move immediately,” said an oilman who imports oil products and runs several petrol stations in Kenya, Rwanda and Uganda. “These are the reasons: VAT is charged at the point of sale and is calculated as 16 per cent on all other costs of the product, over and above the other taxes and levies other than VAT. No importer will agree to sell at a loss simply because politics have been at play. So, even if the Finance Bill 2018 becomes law, with the President’s incorporation of the eight per cent VAT proposal, oil importers will not agree to lower their prices. We must first empty all the fuel bought within the time the VAT on fuel was imposed till we bring in new consignments. And this will take some time. If the people are thinking they are going to enjoy the VAT reprieve immediately, they are deluded.”

The oil tycoon told me that such a situation presents a perfect scenario for the industry to play market games. “If, for example, some oil importers, for whatever reason (most obviously, it would be for a quick super profit), choose to create an artificial oil shortage by hoarding their product, the price must necessarily shoot upwards, momentarily disrupting the official levy on fuel products.”

Apart from the matatu price jolts, the effects of the VAT on fuel has been heavily felt by the long-distance transport trucks that move all manner of goods from source to different markets. Businessmen who transport goats and sheep from Isiolo, Laisamis, Loiyangalani, Mandera, Maralal, Marsabit, Moyale, Turbi, Sololo and southern Ethiopia to Kiamaiko abattoirs in Huruma, Nairobi, told me that their fuel costs had gone by up by between Sh10,000 and Sh12,000 per trip. These animals are carried for up to 14 hours by 10-wheel Mitsubishi Fuso trucks on some of the roughest roads and in the most bandit-prone territories. “Already the wear and tear of the trucks has been staring down at us, but with this new tax on fuel, it has complicated our business,” said one of the transporters.

“The increase in the fuel costs means that they have to also pass down the burden to us butcher-men,” said Francis Kimani, a butcher, who goes to Kiamaiko every day to buy meat products, including goats’ heads, offal for making mutura (sausage-like delicacies) and hoofs for boiling soup. Until recently. Kimani was buying up to 100 goat heads every day at Kiamaiko to sell to his staunchly loyal customers at his outlet at the central bus station in Nairobi. “I arrive at Kiamaiko by 6.00am, pick my stuff and quickly head back to my base, because my customers want to find me ready by latest 11.00am.”

Kimani hires a boda-boda (motorcycle taxi) to transport his meat products in a box-like container. “I was paying the driver Sh250 per trip to the bus station, but after the VAT increase, he doubled the amount,” he said. But that is not the only burden he has to bear: already the prices of his meat products have gone up by more than 30 per cent. “I’ll confess I was doing a roaring business until this VAT thing came. My customers have dwindled, partly because I am buying less goat heads and partly because they are also feeling the pinch.” From selling 100 heads by the end of the day, Kimani is now barely selling 30. He said that if nothing improves, he will consider relocating to either Isiolo or Rumuruti in Laikipia County. The business was proving too difficult to sustain. “I was born in Rumuruti, I know there isn’t much there, but home is home.” “Nairobi tuokire gwetha ido na muturiri.” (“Nairobi’s not home, we just came here to look for money and a living.”) He said that in Isiolo he could look for work as a truck driver.

The VAT on petroleum products was first mooted in 2013, just after President Uhuru Kenyatta and his deputy, William Ruto, formed the Jubilee coalition government. The VAT Act 2013, as it came to be known, was not implemented immediately; it was shelved for three years till 2016. When it came for review in September 2016, Treasury mandarins, through the drafting of the Financial Act 2016, postponed its introduction. But in March 2018, the Treasury Principal Secretary, Kamau Thugge, finally signalled the fact that beginning this September, the 16 per cent VAT on fuel would certainly be effected. This would mean that for every litre of fuel sold at a petrol station, Sh18 would be added on top of the original cost: a 14 per cent increase per litre.

Thugge was candid: The government had no option but to swallow the International Monetary Fund (IMF)’s bitter pill. Since 2016, the IMF has wanted the government to levy VAT on fuel as a way for it to collect extra revenue domestically. However, it is important to note that although petroleum products were previously exempt from VAT, they are still one of the most taxed commodities in Kenya.

This time last year, the Jubilee government was reeling from two shambolic elections – both conducted within two-and-half-months. The government was broke and was looking for credit facilities, so it turned to the IMF. The VAT on fuel, therefore, is part of the stringent conditions that the IMF has imposed on the Jubilee government in exchange for access to a standby credit facility – a fallback plan for Kenya’s Exchequer in case the economy finds itself in the ICU and needs quick resuscitation.

“Playing good politics,” and presumably exhibiting “poor leadership”, President Uhuru seemingly chastised MPs for initially rejecting his proposal halve the VAT on fuel to 8 per cent. The truth of the matter is that the President himself, in regard to the “problematic” taxation issues, is neither playing good politics nor exhibiting wise leadership.

This time last year, the Jubilee government was reeling from two shambolic elections – both conducted within two-and-half-months. The government was broke and was looking for credit facilities, so it turned to the IMF. The VAT on fuel, therefore, is part of the stringent conditions that the IMF has imposed on the Jubilee government in exchange for access to a standby credit facility – a fallback plan for the Kenya’s Exchequer in case the economy finds itself in the ICU and needs quick resuscitation.

“The Bill according to the Budget highlights by the Cabinet Secretary for the National Treasury and Planning is intended is to raise an additional KSh27.5billion to finance 2018/19 fiscal budget year,” observes the Department Committee on Finance and National Planning: Report on the Consideration of the Finance Bill 2018. The report says, “total projected expenditure and net lending for 2018/19 estimates amounted to KSh2.533 trillion to be financed through ordinary revenue (KSh1.743 trillion) and AIA (Annual-in-Advance) (KSh179.95 billion). Expected external grants will amount to KSh47.037 billion, bringing the revenue to KSh1.970 trillion. This leaves a fiscal deficit of KSh562.748 billion to be financed through debt. The proportion of revenue estimates to GDP for 2018/19 is 19.6 percent which is equivalent to that of the 2017/18 budget.”

The Kenya Association of Manufacturers (KAM), one of the lobby groups that presented its resolutions to the committee, argues in the report that, “(the) local manufacturer was losing competition vs major foreign player. The local industries are manufacturing basic products with low gross margin compared to most foreign players, who can support the duty costs. Local players had to increase their prices around (five percent) and it’s the final consumer that will pay for the final bill. This, in turn, was jeopardising local employment.”

A Kenyan industrialist who had intended to contract some local companies to manufacture carton boxes for packaging consumer goods, such as milk, in the Democratic Republic of Congo (DRC), told me he took his business to Uganda after he was hit with a prohibitive tax levy. “The Kenyan companies were charging me $0.7 per carton box – that is exclusive of transport logistics and documentation charges,” said the entrepreneur. “Yet in Kampala, I was being charged $0.42 – inclusive of transport and documentation costs, what they refer to as free on board (FOB).”

On September 18, 2018, President Uhuru Kenyatta rejected the Bill passed by MPs a fortnight before, citing his reasons in a memorandum that sought to overturn some of the proposals shot down by the MPs – chief among them, the 16 per cent VAT on petroleum products and the National Housing Fund, a new tax where the government hopes to impose a tax of 1.5 per cent of income on employees and their employers, ostensibly to fund a home ownership and social housing programme. According to the memorandum, the 16 per cent VAT on fuel has been scaled down to 8 percent in order to raise Sh17.5 billion in the current financial year.

A Kenyan industrialist who had intended to contract some local companies to manufacture carton boxes for packaging consumer goods, such as milk, in the Democratic Republic of Congo (DRC), told me he took his business to Uganda after he was hit with a prohibitive tax levy.

Another proposal contained in the President’s memorandum was to tax betting companies 15 per cent, down from 35 per cent as the case is now. This proposal, instead, hopes to raid the lottery winners’ cash by taxing it 20 per cent. The President is looking to raise between Sh25 and Sh30 billion accrued from the sports gaming taxes. The total computation of President Uhuru’s memorandum proposal was collecting Sh100 billion in this financial year.

Gitau Githongo, writing in the E Review, succinctly observed that “over the past five years, several tax measures have been introduced, including: 12 per cent Rental Income Tax on landlords from 2015, successive excise duty and fuel levy increases in 2015, 2016 and 2018; VAT on bottled water and juices, VAT on food served by restaurants, as well as, piped water; successive increases in excise duties on spirits, cigarettes and mobile telephony; and 50 per cent Gaming Tax on lotteries and bookmakers in 2017, among a host of others.”

Gitau’s article touched on the real reasons why President Kenyatta returned Kenya into the arms of hard-nosed IMF economists: “The parlous state of Kenya’s national accounts – most notably the KSh 5 trillion stock of public debt and ballooning budget deficit…suggests that the slew of tax measures proposed in Budget 2018 was purely about desperately seeking to finance reckless government spending and not about providing incentives for private sector economic growth.”

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Mr Kahura is a senior writer for The Elephant.

Politics

Is Democracy Dead or Has It Simply Been Hijacked?

10 min read. The rise of right-wing populist leaders in many countries across the globe suggests that democracy’s days are numbered. However, as PATRICK GATHARA argues, populism is less a cause of democracy’s demise than a consequence of it.

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Is Democracy Dead or Has It Simply Been Hijacked?
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“Anyone can cook,” declares Chef Auguste Gusteau in the 2007 Pixar classic, Ratatouille, one of my favourite animated movies. The film tells the tale of an anthropomorphic French rat with a passion for haute cuisine, who against all odds, makes it from foraging in the garbage to cooking at a high-end restaurant and being declared “nothing less than the finest chef in France”. It is an inspiring story with valuable lessons about bravery, determination and following one’s dreams. Yet it comes with a caveat, as explained by the funereal critic, Anton Ego, at the end of the movie: “Not everyone can become a great artist; but a great artist can come from anywhere.”

Across the world today, democratic societies appear to have taken Gusteau’s maxim but not necessarily with Ego’s qualification. In Kenya, the death of popular Kibra MP, Kenneth Okoth, has occasioned a by-election in which the ruling Jubilee Party has fronted a professional footballer who has spent much of the last decade in Europe and who, until a few weeks ago, had never even registered to vote or expressed any interest in politics.

“The world is going the Wanjiku way,” Mike Sonko, the populist Governor of Nairobi declared recently on the Sunday show, Punchline. “Take the example of the Ukraine. The President of Ukraine is currently is a comedian. They voted for a comedian. Because the Wanjikus were fed up with the leadership of that country. They were fed up with the politicians…Go to Liberia. They elected a footballer to be their president. Madagascar for the second time have elected a DJ, Rajolina, to be their president”.

He is not wrong. From Donald Trump in the United States to Bobi Wine in Uganda, there seems to be a growing dissatisfaction with and distrust of career politicians and the nebulous “establishment”. In Kenya, this manifests in a contest between the so-called “dynasties” (the wealthy families that have dominated the country’s politics for nearly 60 years) and the “hustlers” (the political upstarts who claim to not be a part of the establishment). It is evident in the “handshake” between President Uhuru Kenyatta and opposition leader Raila Odinga, sons of Kenya’s first President and Vice President, respectively, and their open feud with Deputy President William Ruto, the self-declared head of the “hustler nation”.

The idea that “anyone can rule” is taken by many to be a cardinal tenet of democracy. At its root is a legitimate rejection of the old idea that the ability to govern was only bestowed on some bloodlines, which today has largely been consigned to history’s trash heap.

Yet this democratisation of governance has created fears of its contamination by the unwashed and uneducated masses. A famous quote from the early twentieth century US journalist, Henry Mencken, encapsulates these fears: “As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.” The quote is taken from Mencken’s piece originally posted in the Baltimore Evening Sun in July 1920 in which he rails against the candidacies of Republican Warren Harding and his rival, James Cox, for the US presidency, which he saw as proof of the tendency of democratic competition to result in a race to the bottom.

The idea that “anyone can rule” is taken by many to be a cardinal tenet of democracy. At its root is a legitimate rejection of the old idea that the ability to govern was only bestowed on some bloodlines, which today has largely been consigned to history’s trash heap.

“The first and last aim of the politician,” he wrote, “is to get votes, and the safest of all ways to get votes is to appear to the plain man to be a plain man like himself, which is to say, to appear to him to be happily free from any heretical treason to the body of accepted platitudes – to be filled to the brim with the flabby, banal, childish notions that challenge no prejudice and lay no burden of examination upon the mind.”

Arguing that “this fear of ideas is a peculiarly democratic phenomenon,” he goes on to assert that as politicians increasingly pander to electorates, then “the man of vigorous mind and stout convictions is gradually shouldered out of public life” and the field is left to “intellectual jelly-fish and inner tubes” – those without convictions and those willing to hide them.

Populist idiocy

Many recognise the fulfilment of Menckel’s prophecy in Donald Trump’s presidency, though it is notable that it had been applied to Ronald Reagan and George W. Bush before him. However, it is clear that Mencken had a low opinion, not just of politicians, but of electorates as well. In fact, in his view, it is the ignorance and stupidity of the masses that, in a democracy, makes morons of politicians. And moronic politicians love ignorant voters as evidenced by Trump’s declaration during the 2016 presidential campaign: “I love the poorly educated.”

Menckel’s view is also echoed by a common maxim spuriously attributed to Winston Churchill: “The best argument against democracy is a five-minute conversation with the average voter.” So, is the slide into populist idiocy the inevitable fate of democracy? Can anyone cook? Or is Ego right that while good governance can come from anywhere, not everyone can be a great leader?

“Democracy is hard,” notes Kenyan academic and author, Nanjala Nyabola. It “requires constant vigilance—something that we now see is difficult to achieve even under the most ideal circumstances.” For most voters, this constant vigilance is a tough ask. In fact, for most, getting to grips with the issues and personalities is not worth the hassle.

As Ilya Somin, Professor of Law at George Mason University, puts it, “If your only reason to follow politics is to be a better voter, that turns out not to be much of a reason at all… there is very little chance that your vote will actually make a difference to the outcome of an election.”

And that’s not all. Even if one were inclined to be immersed in the policy debates and to investigate candidate platforms, the sheer size of modern government and the scale and impact of its activities means that one could not hope to monitor more than a tiny fraction of what the state gets up to.

Since voters are unwilling to get their hands dirty, they take short cuts, which often means relying on someone else to tell them what’s going on in the kitchen. For instance, when asked, during the 2005 and 2010 referendum campaigns on a proposed new constitution, whether they had read the drafts, a section of Kenyan voters were reported to have responded with “Baba amesoma” (Father has read it). Baba is a reference to Raila Odinga, perhaps the best known politician in the country and the voters, many of whom had little knowledge of constitutionalism, were opting to take their cue from him. Others chose to follow the musings of pundits and other self-appointed “experts” or journalists or even comedians. The problem here, as with following politicians, is you do not know whether what you are getting is the truth, the real truth and nothing but the truth.

However, that turns out to be less of a problem than one might at first suppose. Truth (shock, horror!) is not always the reason one follows politics – or politicians. Prof. Somin notes that political supporters tend to behave very much like sports fans – less interested in the merits of arguments or how well the game is played than in whether their side wins. This is perhaps best illustrated by the phenomenon of electorates voting against their own interests. For example, in the US, older voters tend to support the Republican Party, which takes a dim view of government entitlement programmes like Medicare and Social Security that primarily benefit the elderly.

Since voters are unwilling to get their hands dirty, they take short cuts, which often means relying on someone else to tell them what’s going on in the kitchen. For instance, when asked, during the 2005 and 2010 referendum campaigns on a proposed new constitution, whether they had read the drafts, a section of Kenyan voters were reported to have responded with “Baba amesoma”.

Even the few neutrals out there tend to talk only to like-minded others or follow the game through like-minded media. In either case, there is little scope for voters to have their views challenged or their horizons expanded. As the former British Prime Minister put it, “The single hardest thing for a practicing politician to understand is that most people, most of the time, don’t give politics a first thought all day long. Or if they do, it is with a sigh… before going back to worrying about the kids, the parents, the mortgage, the boss, their friends, their weight, their health, sex and rock ‘n’ roll.”

A civic ritual

If voters don’t care about politics, why do they even bother to vote? According to Prof Somin, “The key factor is that voting is a lot cheaper and less time-consuming than studying political issues. For many, it is rational to take the time to vote, but without learning much about the issues at stake.”

Voting has thus become a civic ritual, much like going to a football game and cheering your favourite team. It provides the satisfaction of participation – one can brandish a purple finger as a marker of having fulfilled one’s duty without actually doing the hard work of wrestling with the issues. Voters pick their teams based less on ideas than on arbitrary considerations, such as ethnicity or place of birth.

The media exacerbates this trend in two ways; both in the content of their reporting and in the manner they do so. By far, the mainstream press is the most important avenue through which people access and organise information about what is happening in the world. Despite the growth of the internet, which has enabled many more people to get in on the act, news is still largely what the media says it is, whether it is an earthquake or a war in some far-off place or the latest tweet by Donald Trump.

However, as Prof Cas Mudde of the School of Public and International Affairs at the University of Georgia writes, the media tends to report the news, rather than analyse and explain it. The addiction to scoops and “breaking news” and the competition to be first even when every outlet will have the story in the next few minutes and though social media means there is less attention paid to “trends behind the day-to-day news”. Further, in order to attract a larger audience and sell more advertising space or more newspapers, the media prioritises what is sensational over what is important and stays away from anything that cannot be reduced into a soundbite or squeezed into a two-minute news segment.

It also propagates and perpetuates false notions of “objectivity”, presenting itself as a reliable neutral observer rather than as an active participant. Yet through its curating and shaping functions, the media wields tremendous influence not only on how events unfold but also on how on they are perceived. Like a chef, the media takes events and fashions out of disparate events, to be served up to audiences in bite-sized chunks on its many channels.

Brought up on this fast news diet, Prof Somin says, voters come to “mistakenly believe that the world is a very simple place [requiring] very little knowledge to make an informed decision about politics”. And this leads to the embrace of simplistic panaceas for complex problems, and to a preference for populist politicians who deny complexity. If the world is so simple, then fixing it requires no specialised knowledge. Anybody can cook.

It is no wonder then that today there is a lot of angst about the state of democracy and fears that the ship of liberal democratic constitutionalism is floundering on the rocks of populism. The emergence of right wing populist governments and movements in countries as far removed as Brazil, Italy and the Philippines, and in Western countries once thought to hold the high ground for liberal democracy, such as the UK (which is steeped in a constitutional crisis over Brexit) and the US (where President Trump is facing an impeachment inquiry) has many thinking that democracy’s days are numbered.

William Galston has called populism an internal challenge to liberal democracy. Populists, he says, weaponise popular ignorance “to drive a wedge between democracy and liberalism”. Liberal norms, institutions and policies, they claim, weaken democracy and harm the people and thus should be set aside.

Brought up on this fast news diet, Prof Somin says, voters come to “mistakenly believe that the world is a very simple place [requiring] very little knowledge to make an informed decision about politics”. And this leads to the embrace of simplistic panaceas for complex problems, and to a preference for populist politicians who deny complexity.

Populism, though, is less a cause of democracy’s demise than it is a consequence of it. Democracy has been crumbling from within for a long time. Galston blames this on immigration which, he says, has not only upset the “tacit compact” between electorates and elites – where the former would defer to the latter as long as they delivered economic growth and prosperity – but has also profoundly challenged existing demographic and cultural norms, leaving many feeling dislocated in their own societies.

However, it is that compact that is at the root of the crisis, transforming as it does the understanding of democracy from a system where people participate in governance to one where they elect others to govern them. Further, the gnashing of teeth over historic decline in voter turnout blinds many to the fact that, like populism, it is also a symptom and not the problem.

As Phil Parvin notes in his paper, Democracy Without Participation, the decline in political engagement and deliberation by ordinary citizens and the eclipse of broad-based citizen associations by professional lobby groups have resulted in a model of democracy where “politics … is something done by other people on behalf of citizens rather than by citizens themselves”.

In Africa, the “wind of change” that toppled many dictatorships in the 1990s and early 2000s did not result in the empowerment of local populations to do anything other than participate in the ritual of periodic elections. Participation in governance in the periods in between elections is actively discouraged. Those who are dissatisfied with government policies are routinely told to shut up and await the opportunity to do something about it at the next election.

This model of democracy as reality show, where elites compete on who gets a turn at the trough (with the media providing a running commentary and the public choosing the winner) is at the root of the malaise. The professionalisation of democratic participation – outsourcing it to politicians and activists – leads to an increasing polarisation and tribalisation, with everyone claiming to be the authentic voice of the silent and silenced population. Alienation, as political debate focuses on the problems of elites rather than those of the people, becomes inevitable.

It is into this void that the populists have stepped, claiming to do away with the edifice of “the establishment” when in fact, they are seeking to entrench elite rule by doing away with even the appearance of popular consultation. This is what they mean when they evoke the idea of a “strong leader” – one who is not bound by the charade of democratic politics and can thus instinctively channel a pure form of the people’s will. But, as the Mayor of London, Sadiq Khan, says, this is to ignore the lessons of history. Strongmen, as Africans know from bitter experience, tend to reflect, not the aspirations of their people, but their own.

In Africa, the “wind of change” that toppled many dictatorships in the 1990s and early 2000s did not result in the empowerment of local populations to do anything other than participate in the ritual of periodic elections.

The solution may be to do away with elections altogether as a means for selecting decision-makers. In any case, what is required is not less popular participation, but more. We can no longer afford to continue to treat governance as something voters get to participate in once every election cycle, to pretend that democracy is a fire-and-forget proposition. Constant vigilance requires citizens at all levels willing to get their hands dirty, learn about issues, debate openly and engage with representatives – citizens who collectively insist on being heard and who demand accountability from those in power, not simply wait for someone else to do it on their behalf.

Paradoxically, the internet has dramatically lowered the costs of participation and it has never been easier for people to access information, to express opinions, to participate in petitions and to organise outside the parameters set by the elite or by the state. The question for societies with democratic aspirations should be how to make the voices and concerns of ordinary folks, rather than just their votes, count and not be drowned out by the din of elite politics. How do we truly get to the public interested in the ideal of “government of the people, by the people, for the people”?

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How Corruption and Greed Are Destroying Africa’s Forests

8 min read. Africa is losing its forests at an alarming rate, yet the very forces that claim to be protecting them are responsible for their destruction.

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When elephants fight, it’s the grass that suffers.”

As the trade war between the world’s superpowers continues, the global South is the one getting the short end of the stick. The economy of most African countries depends on massive exportation of raw materials, usually controlled by large foreign companies. The exploitation of the local resources, such as wood, never seems to stop, even if massive deforestation in countries such as Kenya, Uganda, and Ethiopia is bound to have catastrophic economic and environmental consequences.

Who are the main (local and foreign) players behind the progressive loss of forested areas in East and South Africa? What are the causes and, more importantly, the effects of this apparently unstoppable exploitation of land on local economies and climate change? How much is corruption responsible for this devastation? Are there any virtuous players trying to staunch this wound, or is it just the usual Western hypocrisy that preys on the unavoidable dependence on “development aid”?

Land grabs and exploitation

The Western world’s hunger for African resources, including land, has only grown more intense due tp the increased demand for carbon and biofuels. The whole continent becomes more dependent on overseas trade day after day. Internal trade between African countries is extremely weak, and most of these countries are large importers of pricey finished goods and services provided by other global partners. Most African countries are exporters of raw materials that generate profit margins that are quite small on their own and are made even smaller by the fact that most of the lands where these goods are produced rest in the hands of large transnational companies.

In many countries, such as Ethiopia, the laws that regulate land leases have been extremely generous to foreign investors. The land is leased for negligible rents, especially in remote and sparsely populated areas, and the approval process for investment proposals is superficial at best. In exchange for an alleged economic return that in many cases never follows, national governments exempted foreign companies from repatriated profits on taxes and taxes on imports of capital goods. All these land grabs are notoriously unjust to the original inhabitants of these lands – usually small farmers and pastoralists who, in some cases, have even forcefully been evicted with the help of the army.

The largest African and global development institutions, such as the Alliance for a Green Revolution in Africa (AGRA) and the World Bank, always sold this process as a much-needed transformation to help the growth of less developed countries. The idea of shifting toward large-scale commercial exploitation of lands and resources has been presented as the perfect recipe to overcome the stagnation of African economies; a transformation that would bring progress, modernity, and riches to all the impoverished lands and populations of the global South. Now the whole continent has been integrated into the global trade system with a relationship of complete unilateral dependence, chained to the volatile prices of commodities, enslaved by continuous “development aid”, and bent under the weight of totally asymmetrical agreements.

The effects of foreign liberalism

The free market didn’t help low-income to countries flourish; the only economic effect was purely cosmetic in nature. The shift towards large-scale commercial exploitation of lands came with promises of better employment opportunities, improvement of existing infrastructure, new opportunities for development, knowledge transfer, and professional specialisation. We saw this happen elsewhere as well, such as in Central America – all these promises eventually turned out to be empty, and only resulted in more poverty, hunger, and unfair exploitation.

In a continent where the vast majority of the population depends on agriculture for a living, uncontrolled liberalisation is nothing but a recipe for disaster. Even the most developed nations of the West know the limits of free markets very well and keep sustaining their own farmers with generous subsidies.

In many countries, such as Ethiopia, the laws that regulate land leases have been extremely generous to foreign investors. The land is leased for negligible rents, especially in remote and sparsely populated areas, and the approval process for investment proposals is superficial at best.

For example, Ethiopia’s annual GDP growth rate kept increasing by nearly 9% between 2004 and 2014, but very few Ethiopians enjoyed the benefits of this growth. Nearly 80% of the population is still composed of farmers and pastoralists whose livelihoods are even more precarious than before after their land was impoverished – their income still incredibly low, at $0.14 per day in some areas. The rural population has been marginalised even further, and local labour is often hired only on a seasonal basis, leaving very little opportunities for the professional and economic growth of all these vulnerable households. Knowledge is kept in the hands of the Western professionals, and their investments on ameliorating the infrastructure are too minuscule to represent a valid trade-off.

This non-inclusive model largely depends on the constant flow of capital, which necessarily come from foreign investors, creating an unbreakable cycle of dependency. Technology-based land exploitation has caused the environment to be degraded, and has substituted traditional sustainable and labour-intensive agriculture with intensive use of fossil fuels, pesticides, and widespread deforestation. The loss of biodiversity of large-scale monocultures and the destruction of large forested areas weakened the ecosystems against unexpected weather changes and other natural disasters.

Deforestation and greed

The constant demand for crop and grazing land, as well as wood for fuel and construction, have a tremendous impact on soil conservation and weather management. Deforestation, in particular, is one of those problems that, if left unchecked, may cause a planetary disaster.

Africa’s tropical rainforests include the Guinean forests of West Africa and the Congo Basin, which comprise the second-largest forest cover in the world. However, according to Professor Abraham Baffoe, Africa regional director at Proforest, this immense “world’s set of lungs” is rapidly disappearing. At the beginning of the 20th century, Ethiopia’s forest coverage reached almost 40%. Year after year, almost 200,000 hectares of forest were lost; by 1987 it was reduced to just 5.5%, and in 2003 it had gone down to a mere 0.2%. According to Innovation for Poverty Action (IPA), between 2000 and 2010, Uganda lost forests at a rate of 2.6% every year. Over the last century, West Africa has lost almost 90% of forest coverage.

Losing forests has devastating effects on the indigenous population, the local ecosystem, and the global environment as well. Forests are critical to lowering carbon dioxide levels in the atmosphere, to stabilising the weather, and preventing soil erosion. Among the highest causes of carbon emissions from human activity, deforestation is the second after burning fossil fuels, accounting for approximately 20% of world greenhouse gas emissions.

Soil erosion alone may cause the drying of lakes, such as in the case of the three lakes in the Rift Valley that recently dried up. As the soil is massively washed into the lake, the water is pushed up to a larger surface and rapidly evaporates. Without water, droughts ensue, causing famine, starvation, and poverty.

An estimated 100 million African people rely on forests for support and finding freshwater, food, shelter, and clothing. Forests support biodiversity as well, and many plants and animals only exist in these regions. Without forests, many animal species, such as chimpanzees, are endangered since they can’t survive without their habitat, and entire towns are at risk of rainforest flooding.

Africa’s tropical rainforests include the Guinean forests of West Africa and the Congo Basin, which comprise the second-largest forest cover in the world. However, according to Professor Abraham Baffoe, Africa regional director at Proforest, this immense “world’s set of lungs” is rapidly disappearing.

But the ecological devastation caused by the alleged modernisation of agriculture is not the sole reason behind the massive deforestation occurring in Africa. African forests store 171 gigatons of carbon, and there is a wide range of different interests swarming around them. Everybody wants to put their hands on this gigantic loot, no matter the consequences for the local populations or climate change.

The frequent conflicts that ravage the continent take their toll on forests as well. For example, after the South Sudan crisis in December 2013, nearly one million refugees, mostly women and children, have sought shelter in nearby Ethiopia and Uganda. Once there, they started chopping wood to build their encampments and to fuel their stoves. This had a significant impact on local forests, according to experts.

The impact of corruption on deforestation

Corruption has a tremendous impact on global deforestation. With 13 million hectares lost each year, the Food and Agricultural Organisation (FAO) has identified the illegal timber trade as one of the principal causes of forest loss. The estimated value of illegal forest activities accounts for more than 10% of the value of worldwide trade in wood products. And corruption in the forest sector may increase the cost of forestry activities by about 20%.

Most countries in Central and Western Africa that are particularly rich in forests and other resources score particularly low on the Corruption Perceptions Index (CPI), a global index of public sector corruption established by Transparency International. Without a transparent and democratic administration whose framework is built on solid ethical principles, the land rights of local communities and marginalised groups are constantly violated. In sub-Saharan Africa, one citizen in two had to pay a bribe to obtain a land service, such as registering land for his household.

The forest sector is especially vulnerable to grand and petty corruption activities because of the non-standardised but high-priced timber products and low visibility. Government officials often collude with powerful European, American, or Asian companies since they offer forest as a highly valuable commodity in exchange for power and money.

Many indigenous populations have no access to information and justice, cannot claim their rights, and have no chance but to bend the knee when land grabbing laws are enforced by corrupt governments. Foreign companies know how easy it is to violate national regulations and often do so with total impunity knowing that punishment would probably be very light. Funds generated from the profit of the forests are usually embezzled or siphoned out of the continent to be laundered through complex schemes of multi-layered shell offshore businesses. Money that could be invested in social services, jobs, and better infrastructure ends up being devoured by greedy officials, money-hungry corporations, and shady smugglers.

Reforestation and other plans to restore Africa’s forests

Luckily, not all is as bad as it seems. Ethiopia has just started a restoration process that includes a reforestation programme that should replace 22 million hectares of forests and degraded lands by 2030. Even better, in 2018, the government finally revised the National Forest Law to provide better recognition to the rights of local communities and acknowledge their importance in managing lands and crops. The new law also includes much more severe penalties for those who endanger forest ecosystems or who extend farming into natural forests.

Corruption has a tremendous impact on global deforestation. With 13 million hectares lost each year, the Food and Agricultural Organisation (FAO) has identified the illegal timber trade as one of the principal causes of forest loss.

In Uganda, Project Kibale focuses on restoring the Kibale forest and has managed to restore 6,700 hectares of forest so far. On lands owned by subsistence farmers, the Community Reforestation project coordinates hundreds of small community-based tree planting, education, and training initiatives. Similar projects are in operation in Kenya as well, such as Carbon Footprint, B’n’Tree, WeForest, and the Green Initiative Challenge.

Although certainly commendable, many of these reforestation efforts simply seem to be a Band-Aid on a gaping wound. The core problems – corruption, grossly uneven distribution of power among players, and poorly-designed regulations – are not addressed at all. The handful of trees that get planted only help these parasites to get more wood to harvest in due time.

It can also be argued that many of these brave steps toward sustainability are nothing but green rhetoric spin for Western audiences. Wilmar’s hypocrisy, for example, was exposed back in 2015. The multinational of palm oil had abused human rights in Indonesia for years, expropriated lands with no qualms, polluted the environment, and destroyed crops and forest in large areas. After being named by Newsweek as “the world’s least environmentally-friendly company” in December 2013, the palm oil giant adopted a “no deforestation, no peat, and no exploitation policy” and became a champion of environmentalism. However, this was just window-dressing that was rapidly unmasked in subsequent years by NGOs in Uganda, Nigeria, and Liberia. The icing on the cake? In previous years, Wilmar was financed by none other than the United Nations International Fund for Agricultural Development (IFAD).

Conclusion

When the rules are made by those who dominate the markets, globalisation becomes a source of profound inequalities. The blatant asymmetry in bargaining power between the global superpowers and the global South has all but abolished the few safety nets that national laws could provide. All the regions that are rich in resources and commodities are quickly transformed into no man’s lands where the indigenous populations become unwanted guests to be displaced. Entire ecosystems are ravaged and exploited, no matter the consequences. And when newer, fairer rules are established by a more ethical administration, they are rapidly dismantled by leveraging corruption and bribes.

The word “development” has been mentioned so many times that it is now empty and meaningless. Nonetheless, the only way to shift toward a more sustainable economic system is to focus on the real development of African countries. Reforestation is just palliative therapy that is trying to heal some of the wounds of an already terminally ill patient. Africa can flourish only through a more radical approach that allows Africans to grow, develop, and fully exploit the immense value of their enormous resources instead of leaving them in the hands of foreigners and global corporations.

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The Persistence of Small Farms and the Legacy of the Monoculture Mindset in Kenya

12 min read. PAUL GOLDSMITH explores the evolution of agriculture policies in Kenya that failed to recognise the importance of smallholder farming, which has proved to be more resilient than large-scale agriculture projects.

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The Persistence of Small Farms and the Legacy of the Monoculture Mindset in Kenya
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I once drove up the eastern side of Mt Kenya with a manager working in the California horticulture industry. We passed through the Mwea irrigation scheme’s mosaic of rice plots and the smallholder coffee zone in Embu. After crossing the Thuchi River, we transited through the mix of tea farms, coffee plots, and patches of small fields of maize, pulses, and bananas framed by the heavy tree cover blanketing the hills and valleys. The Meru lowlands stretched out to the east, the miraa-dotted slopes of the Nyambene Hills loomed close as we approached Meru town. In the space of three hours we had transected one of the region’s most agriculturally variegated and productive landscapes.

Two days later we drove across the northern saddle of the mountain, leaving the smallholdings created by late colonial-era settlement schemes before cruising past the wheat fields of Kisima and Marania farms and their neighbours. The road carried us past the uniform blocks of horticulture farms and greenhouses stretching across the high plains of the mountain’s northwestern quadrant en route to Nanyuki. Over a plank of some insanely delicious beef at one of the town’s famous local nyama choma joints, my guest tells me she was impressed by the kick-ass agriculture she saw during our trip.

I remarked that we had crossed an area that produces the world’s best tea, some of the planet’s premier Arabica coffee, and the country’s most sought-after potatoes, French beans and other vegetables that grace European tables. I also informed her that we had skirted the range hosting Africa’s most sophisticated agroforestry system, home to the Horn region’s most prized Catha edulis.

“That’s interesting,” she said, clarifying that she was referring to “the area of proper farms we passed through this morning”.

Kenya’s agriculture generates approximately 24 per cent of the country’s GDP, 75 per cent of its industrial raw materials and 60 per cent of the country’s export earnings. Approximately 26 per cent of the earnings are indirectly linked to the sector through linkages to agro-based manufacturing, transport, and trade.

The sector is a major employer, with an estimated 3.8 million Kenyans directly employed in farming, livestock production and fishing, while another 4.5 million engaged in off-farm informal sector activities. Agriculture remains a key economic sector with significant unexploited potential for adding value through post-harvest processing.

The relationship between large-scale and small-scale producers in Kenya continues to evolve. Smallholder farmers generate the larger portion of overall agricultural value; large farms are still critical contributors to domestic food security and export production while pioneering new technologies and marketing arrangements.

Kenya’s agriculture generates approximately 24 per cent of the country’s GDP, 75 per cent of its industrial raw materials and 60 per cent of the country’s export earnings.

The economists and policy-setting bureaucrats at the World Bank and other important financial institutions, however, now question the small farm sector’s capacity to satisfy Africa’s future needs. The experts have tacitly supported the controversial trend of external investors’ acquisition of the continent’s underexploited land to develop capital-intensive plantations and ranches. Agricultural progress means big fields, straight lines, greenhouses, and large grids of sprinklers, as the comments of the manager reaffirmed.

The rise of monoculture

Assumptions about the superiority of large-scale agriculture have remained unchallenged since the migration of Europeans to the Americas, Asia, and Africa. They came, saw, conquered, and converted the wide open spaces they found into plantations producing sugar, cotton, rubber, tobacco, soybeans, and a long list of other crops for export to the industrial world.

When European diseases decimated the indigenous inhabitants in the New World, the planters plundered Africa to replace them. Steam powered the Industrial Revolution; colonial plantations and mines provided the raw materials. The textile mills of Lancashire generated the profits financing Great Britain’s global empire, and America’s South supplied the cotton.

Large-scale agriculture’s global hegemony grew out of military firepower, capital, technology and ruthless exploitation of labour, not superior crop and animal husbandry. The reign of King Cotton, for example, relied on increasing quantities of land and imports of African labour to compensate for rapid soil fertility decline. Southern land owners were poor farmers who added little value to the development of their agriculture beyond the use of the whip and the noose.

Class dynamics also contributed to the rise of the large commercial farm. The working conditions of the working-class adults and children working the looms was only marginally better than that of the slaves producing the fibre. Growing numbers of the freehold farmers in Europe who were driven off their land avoided this fate by crossing the Atlantic Ocean, attracted by the US government’s recruitment campaigns offering access to land. The industry of the displaced farmers powered the nation’s westward expansion. The American Civil War decided the contest over which system – freehold or plantation – would dominate in the virgin lands beyond the Mississippi River.

Large-scale agriculture’s global hegemony grew out of military firepower, capital, technology and ruthless exploitation of labour, not superior crop and animal husbandry.

The outcome was the same. Within several decades, the massive herds of bison were decimated and the indigenous inhabitants reduced to paupers on reservations. Science and technology came into play. The impressive advances generated by agronomic research and mechanisation extended the ascendency of commercial farms and plantations into the modern era. Economies of scale enabled by railways and the steamship extended the dominance of single commodity farming systems across the world.

Relegation of pre-industrial agricultural populations to the status of pre-scientific peasants preceded the imperial occupation of Africa. The Europeans established their plantations and large farms across the continent’s savanna and highlands. Like the colonialists before them, both capitalist and socialist governments’ rural policies were predicated on the need to introduce modern scientific agriculture. The choice was as basic as the difference between a tractor and a short handle hoe.

The Kenya conundrum

A matrix of physical, climatic, spatial, and social factors complicated the installation of large-scale agriculture production in Africa. Agriculture played a singular role in the development of the modern Kenyan economy, but commercial agriculture and ranching developed by European settlers are only partially responsible for the sector’s progress.

Free land and inexpensive labour facilitated the establishment of commercial farms during the early decades of colonial rule. Drought, locust invasions and crop losses to pests and wild animals, and to vector-borne diseases posed a serious challenge. The effects of the latter were minimised by quarantining the locals in native reserves and demarcating the band of ranches that ring-fenced the so-called White Highlands. Not all the white settlers survived; some left to start over in colonies to the south, but those who stayed on prospered with the assistance of the colonial state.

After World War I the government offered land concessions to war veterans boosting the population of approximately 6,000 white settlers in 1917 to 20,000 in 1936. This abetted the diversification of the new estate sector, which came to encompass coffee, tea, cattle, sisal, cotton, wattle, and other export commodities that sustained the colony’s finances. Expansion raised the demand for African labour while fueling frictions over land between settlers and their African neighbours. It also made managing settlement considerably more difficult for the government and civil servants in the countryside.

Indigenous producers evolved intricate mechanisms of adaptation and risk management to shifting environmental conditions and chronic climatic instability. The over 100,000 African squatters on European farms by 1947 demonstrated their resilience in new circumstances. Despite the restrictions they faced, they out-performed the owners in many ways. The surplus reinvested in livestock led to competition for pasture on the estates, and this prompted restrictions limiting the size of cultivated plots and the number of livestock the Africans were allowed to keep. The number of days of labour owed to the estates also increased over time, doubling from 90 to 180 days a year.

Dependence on native labour in effect led to the parallel development of two distinct large-scale and small-scale systems on the same landholdings at the same time. The contradictions inherent in this situation, combined with the political threat of the Mau Mau, forced a rethink that led to the Swinnerton Act in 1954, which opened the way for the production of export crops in the African reserves.

The sectoral duality generated by these developments has vexed Kenya’s agriculture policy ever since. Kenya gained independence committed to preserving the economic stability provided by the estate sector while satisfying the political expectations of its citizens. The latter translated into the transfer of settler lands under the Million Acre Scheme, support for the cooperative movement, and the deployment of small farmer extension services.

The structural inequalities symbolised by the contrast between the landed elite and the masses nevertheless fueled strident opposition to the Jomo Kenyatta government. Kenya’s status as an island of stability in a turbulent region encouraged international support for the development of schemes and projects mirroring a succession of theories and economic models debated by academics and institutional experts.

One critic of international development accurately described these interventions as policy experiments. Some worked and many did not. The funding flowed despite the repeated failures epitomised by the large agricultural projects dating back to the doomed Tanzania Groundnut Scheme. Attempts to rectify flaws in the Bura Irrigation Scheme, the world’s most expensive at the time, proved futile when the Tana River changed course.

How do we explain the failure to acknowledge the results of such “experiments”?

In a 1988 article, Goren Hyden attributed the syndrome to Africa’s monoculture legacy, which he defined as “mono-cropping in agriculture, single fixes in technology, monopoly in the institutional arena, and uniformity in values and behavior.” The rise of hegemonic economic monocultures, he went on to observe, are usually preceded by a period of competition and experimentation.

No such selectionary forces informed the large-scale solutions designed to alleviate Africa’s agriculture malaise. The continent’s initial conditions were different. The unique regional political economies of the precolonial era did not count. The formal protocols governing exchange among diverse communities were obsolete. The need to differentiate between size and scale did not apply.

Small as the new big

Africa’s lost decade highlighted the neglect of small-scale farmers. In an article in the same edited volume featuring Hyden’s monoculture legacy thesis, Christopher Delgado noted, “It is unlikely that more than 5 five cent of current African food production comes from large farms. A 3 per cent growth of productivity of smallholders would be equivalent to a 60 per cent growth of productivity on large farms.”

This point segued into the large body of empirical evidence marshalled in support of a new policy focus on the smallholder sector. But there was a problem, as he and other pro-smallholder analysts recognised: The high variability in conditions and circumstances within and across African countries complicated cost-effective delivery of the services, inputs, incentives, and infrastructure need for the interventions to pay for themselves.

One critic of international development accurately described these interventions as policy experiments. Some worked and many did not. The funding flowed despite the repeated failures epitomised by the large agricultural projects dating back to the doomed Tanzania Groundnut Scheme.

Asia’s breakthrough was an outgrowth of substantial international research supported by national research centres into two basic commodities. The same approach has not worked in Africa because technical enhancements need to contend with multiple crops systems, variations in soils, spatial differentials complicating access to water, markets, and service, local pests and diseases, transport and communications infrastructure, and political variables linked to ethnic constituencies, to name a few of the factors determining the productivity of small farmers.

Research attesting to the more efficient per capita and land unit output of small farms also indicated that there was still considerable scope for raising household incomes by enhancing the productivity of labour. The Kenyan government’s support for small-scale dairies, tea production, and the efficacy of extension services furnished proof. Like the case of colonial squatters before them, smallholder producers began outperforming the large farms and plantations.

Kenya and its bimodal policy frame was often cited as a success story at the time, but was this because government policy focused on concentrating the limited resources available in relatively fertile areas? The failure to replicate these successes further down the ecological gradient invoked a more complicated set of variables.

Other state-supported initiatives, such as smallholder cotton, floundered, and even a tested policy like fertilizer subsidies proved difficult to implement because the cost of delivering the input to small farm households often ended up cancelling out the benefits, especially during years when low rainfall or other external factors reduced output.

During the early 1980s Kenya’s agricultural sector reached the zenith of its development under state control. A matrix of factors, including lower prices and higher market uncertainty, declining civil service terms of pay, gradual closure of the agricultural land frontier, and the highest demographic growth rate in recorded history explain subsequent developments.

Institutional entropy set in. The food security problem became a full-blown national crisis around the same time as government mismanagement of strategic maize reserves exacerbated the impact of the 1984 famine. The food catastrophe marked a turning point, concretising the case for the structural adjustment policies that came into effect during the following years.

The donor-mandated policies included foreign trade liberalisation, civil service reforms, privatisation of parastatals, and liberalisation of pricing and marketing systems, which later involved relaxing control of government agricultural produce marketing and reforming cooperatives.

Increases in quality and efficiency tend to translate into lower commodity prices over time, and the same appeared to hold for institutional reforms. In any event, the policies designed to increase efficiency and decrease state involvement in the economy did not reverse the decline in agricultural production. Declining prices for traditional agricultural commodities and Africa’s terms of trade in general was seen as emblematic of a larger malaise stemming from poor governance and economic mismanagement in Kenya and other African countries.

Although most Kenyans blamed the Daniel arap Moi government, the less than creative destruction wrought by the penetration of capital and primitive accumulation by state-based actors was the real culprit responsible for the economic carnage that followed in its wake. The outcome was “a quasi-stagnant society” qualifying the observation Thomas Picketty offered in his 2014 book, Capital in the Twenty First Century: “wealth accumulated in the past will inevitably acquire disproportionate influence”.

In Kenya, the consequences included the revolt of smallholder coffee farmers in Nyeri, the burning of sugarcane fields in western Kenya, the collapse of cooperatives, an increase of subsistence production on small farms, the commercialisation of livestock raiding in the rangelands, and the rise of cartels that seized control of export commodities and local produce markets.

The situation in Kenya was symptomatic of the forces that eroded the impact of the pro-small-scale agriculture policy framework that had gained traction during the same period.

The release phase and agrarian transition

Subsequent developments in rural Kenya invite us to revisit Picketty’s choice of words in the observation cited above: the reference to “quasi-stagnant” is indicative of a larger dynamic. From an ecosystems perspective, the turbulence arising across Kenya’s agricultural sector and the hollowing-out of state institutions corresponds to the release phase in ecological cycles.

The role of forest fires that remove old growth, allowing regrowth and revival of species suppressed by the canopy of large trees, is the standard example used to illustrate the release function. In the context of human societies and other complex systems, it refers to transitional episodes in “an adaptive cycle that alternates between long periods of aggregation and transformation of resources and shorter periods that create opportunities for innovation.”

For present purposes we can equate Picketty’s quasi-stagnation with the onset of a transitional phase of reorganisation leading to renewal. Support for importation of large-scale capital-intensive agriculture to meet Africa’s future needs, in contrast, correlates with the old school ecological succession model. The degradation of rangelands resulting in the replacement of overgrazed grass and shrubs by less nutritious invasive species is a common example.

The African land grab by foreign investors now taking place in many sub-Saharan countries is in effect a case of replacement substituting for the adaptive processes underpinning indigenous African production systems. The government’s willingness to allocate large tracts of Tana Delta land as an incentive for foreign government investment in the LAPSSET mega-project is an example of this replacement strategy in Kenya.

I was part of a team that undertook a three-year study of commercial agricultural models in Ghana, Kenya, and Zambia. Initially motivated by the problem of large-scale agribusiness investments, the research design focused on three models: large commercial farms, plantations, and contract farming. The team’s general conclusion underscored the emergence of large- and medium-size commercial farms in the three countries.

Although most Kenyans blamed the Daniel arap Moi government, the less than creative destruction wrought by the penetration of capital and primitive accumulation by state-based actors was the real culprit responsible for the economic carnage that followed in its wake. The outcome was “a quasi-stagnant society”…

My personal take was slightly different, and although they may be particular to our Kenya research, two issues warrant mention. The first is the resilience of smallholder households in our surveys and life histories.

Without getting into the intricacies of the data, several factors support this. The time series data showed improved food security for most of the households sampled, and a corresponding decline in conflict over land: only one respondent complained about the ownership of the large farms and plantations in the area.

While the poorer families were hard-pressed to make ends meet, the diversification of income generation strategies indicate that even a small half-acre plot defrays the cost of food purchases while providing a base for participating in the rural economy.

High levels of mobility within the region and a general trend of reversed urban migration add further support to this point. For example, urban unemployment rates of 19.9 per cent for 2009 and 11.0 for 2014 per cent were about double of rural rates.

The process of consolidation underpinning the large farm formation across agro-ecological zones is underway, but it is slowed by the reluctance to sell land and a correspondingly high incidence of leasing land. This is also true for large holdings outside our Mt. Kenya research area, such as the Rift Valley, where owners are holding on by leasing out parcels to smallholders. The successful estates and horticultural firms have developed mutually beneficial links with their smallholder neighbours. This is based on outsourcing production, the sharing of technological innovations from the production of certified seed potatoes to electronic wallets facilitating rapid and verifiable payments to contract farmers, and multi-stakeholder participation in the management and conservation of water sources.

While the poorer families were hard pressed to make ends meet, the diversification of income generation strategies indicate that even a small half-acre plot defrays the cost of food purchases while providing a base for participating in the rural economy.

Our sample divided the household into two categories: those involved with the large commercial farms and those who remained independent. The scores for involved households were significantly higher for crop yields, fertilizer use, income, and most other variables. All of these observations attest to the synergies generated by the large-scale small-scale symbiosis that began to emerge during the final years of the colonial era.

This brings us to the second point – the enduring influence of the monoculture mindset. It resurfaces in the World Bank’s categorisation of both large and small organisational units’ contribution to the continent’s socio-economic transformation. Dualities deceive; learning by trial era works.

The elephantine LAPPSET project, the hallucinatory Galana-Kulala scheme, the government’s Big Four agenda, all suggest that the Chinese version is more of the same.

 

Written and published with the support of the Route to Food Initiative (RTFI) (www.routetofood.org). Views expressed in the article are not necessarily those of the RTFI.

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