What happens when a new idea grows up, and grows old?
There is drama in the Uganda parliament, where a statutory committee is bringing to light several truly amazing revelations regarding over twenty years of the effects of the reforms to Uganda’s banking sector.
Working from a report received from the Auditor-General, the committee, known as the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), is building a picture of the inside story of how a slew of banks came to be variously taken over, shut down and/or sold off.
Starting with Teefe Trust Bank in 1993, a cluster of institutions fell one after the other: Uganda Commercial Bank (1998/2001), International Credit Bank Ltd (1998), Greenland Bank (1999), Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014).
The committee wants the details on how Bank of Uganda came to the decision to close down any given bank, and then the manner in which such a decision was carried out.
Apart from being unable to demonstrate any kind of procedural rigor, central bank officials have not been able to show the terms of reference for the acts of dissolution; the full audited accounts of the wound-up banks; the location of seized bank title deeds that have never – decades after the closures- been disposed of; the inventory of some of the banks’ assets; and handover reports. In one case, it was discovered that they had allowed an appointed liquidator to dispose of a seized banks assets at a 93% discount, granted them immunity, and fully conceded to the company’s demand that their agreement be governable by UK law only.
The committee wants the details on how Bank of Uganda came to the decision to close down any given bank, and then the manner in which such a decision was carried out.
In the face of this flood of damning testimony, one hard-pressed Central Bank functionary found himself blurting out the assertion that there was “no need for an inventory” when winding up one of the institutions.
But what may be missed in this avalanche of details is the fact that the banks concerned all had one common thread: they were either locally owned, owned by Africans from elsewhere on the continent, or were statutorily established to service locally owned commercial activity.
That, actually, is the real story.
The immediate trigger for all this drama has been the 2016 sudden shut down, sell off and dissolution of Crane Bank, perhaps until then the jewel in the crown of a business empire owned by the flamboyant Sudhir Ruperelia.
That this probe comes now, has led many to speculate that perhaps the committee is working at the behest of the Crane’s erstwhile owners as part of a vendetta against the central bank officials involved in the closure operation. Certainly, Uganda’s media –and in particular, the online community- has suddenly become awash with stories that take a strong interest in the operations of Crane Bank’s eventual buyer, as well as the character and reputation of the various Central Bank high officials.
Whatever the Attorney General’s impetus, his office found itself looking at the entire body of shutdowns undertaken by the central bank, since it was “reset” by the passing of a new Bank of Uganda Act in 1993, to replace the initial 1969 law establishing it.
The audit has become an impromptu review of the entire financial services aspect of Uganda’s now twenty-five year old liberalization policy, which was seen as groundbreaking in some quarters, at the time of its inception.
Various shades of opinion will continue to debate the policy, but twenty years down the line, one outcome is clear: there are virtually no banks owned by Ugandan Africans left in the country. Coincidence? Perhaps.
One effect of this had has been to create the impression that “foreign” banks are more “professionally managed” than the home-grown ones. But if that were really the case, then the West’s great crash of 2008 would simply never have happened. There are enough instances of foreign banks getting caught and being fined in other jurisdictions. In fact some of the foreign banks facing disciplinary action in South Africa and the UK (over cheating on the inter-bank lending rates) are banks that also have representation in Uganda. Why would banks choose to behave well only in Uganda, and then decide to misbehave elsewhere?
One effect of this had has been to create the impression that “foreign” banks are more “professionally managed” than the home-grown ones. But if that were really the case, then the West’s great crash of 2008 would simply never have happened.
There will always be the temptation for some level of “cheating” among banks. After all, it is a business about using money to make a lot more money. This is rarely a saintly pursuit. For example ABSA of South Africa (which used to be Bankcorp, and then was bought by Barclays who then took on the name) was discovered to have received an unexplained payout of about $166 million from the then apartheid government. They are still refusing to pay it back, even after the South Africa Ombudsman said they should.
This is not to suggest that all African Ugandan operators were innocent of any form of malpractice or incompetence. However, the authorities have always had various options at their disposal for dealing with this. The most common is for the regulatory authorities to impose heavy fines, remove errant directors, and in some cases also pump cash into the ailing culprit.
Like the “sin bin” concept in rugby, another equally rough and tumble activity, the object is to accommodate the energy of the game, while allowing it to proceed as safely as is manageable, not to kill off its spirit.
What the Uganda banking authorities can be accused of doing is to have decided to target only one category of player, and then have only one “remedy”: permanently eject them not just from the game, but all future tournaments, and also confiscate their equipment.
This is like a police traffic operation in which only one brand of car gets stopped and examined. Naturally, some offenders will be found. What then happens is that the driver is fined, the car’s number plates are removed, the passengers thrown out, the driver jailed, and the vehicle itself seized.
But this is by no means the focus, or stated interest of the parliamentary committee, but perhaps it should be.
It may offer a different perspective from which to understand what is now going on at the Uganda parliament. Beyond the forensics, what was the intent?
Perhaps the real purpose of the 1990s reforms to the banking system was to bolster the central bank’s capacity to get native capital out of the market and prevent the emergence of an autonomous business class.
If that were to be the case, it would come as no surprise to any student of Uganda’s real history: there is a precedent for this. In fact, it is a very old story.
Perhaps the real purpose of the 1990s reforms to the banking system was to bolster the central bank’s capacity to get native capital out of the market and prevent the emergence of an autonomous business class. If that were to be the case, it would come as no surprise to any student of Uganda’s real history.
In the book: The Social Origins of Violence in Uganda, historians Kasozi, Nakanyike, and Sejjengo list a whole body of measures aimed at preventing the emergence of such a class:
“As early as the 1890s the colonial state began excluding Africans from the processing and marketing stages of production- the most lucrative in the colony’s commodity-based economy. Kabaka Mwanga tried to buy a saw-mill but was prevented by the authorities from doing so. In 1909, Governor Bell ordered the destruction of hand-gins, which handled some thirty-five per cent of cotton produced in the colony…. In 1913, Kina Kulya Growers’ Society of Ssingo Farmers was discouraged from marketing its own cotton. The Cotton Rules of 1918 restricted middlemen from operating within five miles of a ginnery, all of which were owned by foreigners. The Buganda Growers’ Association tried to market its own cotton in 1923 but was discouraged by the government. Four years later, Sepiriya Kaddumukasa tried to erect a ginnery on his own land but was refused a licence. In 1920 the Buganda Cotton Company was prevented from ginning and marketing its own cotton. In 1932, when the Uganda Cotton Society tried to obtain high prices by ginning and marketing its own cotton and “eliminating the Indian middleman,’ it was not allowed to do so. In the same year, the Native Marketing Ordinance (Coffee) curtailed the buying activities of African businessmen.”
The purpose of the colonial economy was to privilege British originated commerce over the local indigenous economy. Britain’s Chillington Tool Company alone, for example, all but wiped out indigenous ironworking by the 1940s, by dumping large amounts of cheap, mass-produced hoes on the Uganda market.
in Uganda, Western economic policy faced two obstacles to its aim of preventing–or at least endlessly delaying- the aggregation of African capital.
First was that the politics of the colonial conquest of Buganda meant the British had to concede vast tracts of land to primarily the Anglican African warlords that helped them overthrow the two resisting Kings, Kabalega and Mwanga. What is more, they had to concede laws restricting ownership of such land to black Africans only. Buganda, and Tonga were thus the only two colonial territories in the entire jurisdiction of the British Empire, in which native land claims were legally upheld, after a fashion, in the new order. As Africans entered commerce (or tried to) these land holdings began to come into play as collateral for loans.
The purpose of the colonial economy was to privilege British originated commerce over the local indigenous economy. Britain’s Chillington Tool Company alone, for example, all but wiped out indigenous ironworking by the 1940s, by dumping large amounts of cheap, mass-produced hoes on the Uganda market.
The second was the raft of “nationalist” measures put in place as an expression of the Independence movement. For example, an African Trade and Development Fund (ATDF) had been established in the late colonial period to provide a form of “affirmative action” for all those earlier generations of deliberately disadvantaged Africans. Even without privately-owned African banks, the state had established the Uganda Commercial Bank, envisioned as a cheap reliable lender to commercial African farmers, as well as enabling the co-op movement –battling on from the 1920s- to establish its own bank.
Prior to that, Kasozi tells us:
“The banking system was controlled by British- and India- based banks…. They did not lend to many Africans, although they operated on an accumulation of African peasant savings, which was lent to foreign businessmen to further exploit national resources. In 1949 [anti-colonial leader] Musaazi called for the use of peasant [savings] to create an agricultural bank. It was not until later that such a bank, the Uganda Credit and Savings bank, was floated. By that time Africans had been left so far behind in business expertise that they could not compete with Indo-Pakistanis and Europeans. Africans could not participate in the lucrative wholesale trade because the colonial government issued wholesale licenses only to traders with permanent buildings of stone and concrete: very few Africans had such buildings.”
The Uganda Credit and Savings bank is what became the Uganda Commercial Bank. At its peak, it operated well over half of all bank branches in the country and held 50% of all commercial bank deposits. The South African Standard Bank would be the one to buy it in the great 1990s sell-off now being picked apart in parliament. Standard went on to buy Grindlays Bank, which had been part-nationalised in the 1960s, and merged it with its new concern.
The evidence from parliament suggests that some looting and asset-stripping has taken place. Even if that were true, I do not think it would have been the real goal. The assertion bears repeating: the purpose was to drive native African capital out of the banking sector and to do so in such a way that it would find it hard to regroup and try and make another entry.
The story goes further back still: a less-formally recorded narrative exists of how it was common practice under colonial education, to deny opportunities for advancement to pupils coming from the more well-off families, often associated with the aristocracy. The method was to shunt them into courses aimed at closing off their possible qualification to tertiary education. At the same time, such opportunities were left open to African pupils of other backgrounds.
A few such children of the better-off therefore gained their higher education at the own parents’ expense where affordable, after leaving the formal colonial system, and studying abroad.
The purpose added to the earlier one of preventing or delaying the aggregation of native capital for as long as possible. The idea seemed to be to prevent also the possibility of the owners of any such aggregated capital gaining personal access to new knowledge and skills.
This also explains the Western (read British) hostility to the post-Amin Uganda National Liberation Front (UNLF) coalition government whose economic protectionist policies were aimed at boosting local manufacturing capacity. The open British support to the military junta that overthrew the coalition government in May 1980, and the Milton Obote regime it helped back into power, brought that aspiration to an end.
The more recent, two-decade legislative siege of original African land holdings that prevents them from using their holdings to raise capital, is an additional measure towards this goal.
The World Bank was certainly most enthusiastic about the new Bank of Uganda legislation. On the 14th May 1993, the very same day the Act passed into law, a team from the World Bank landed at Entebbe airport and were driven straight into a meeting with the then bank governor. There have been World Bank associated technocrats based in the Bank of Uganda building ever since.
Although owned by a Ugandan citizen, it cannot be said that this was the reason Crane Bank was also closed. Evidence used by Bank of Uganda to shut it down suggests it was more of a conduit for money laundering, leaving a large hole in the new banking system, and threatening its stability. The World Bank would not have liked this. Besides, the bank’s own attitude towards domestic capitalists was far from friendly.
The former Crane Bank headquarters building was on Kampala’s high street, next to a parking lot that was created for it over twenty years ago. That space used to be occupied by a set of modest African-owned shops, one of which was known as Kayondo Shoemakers. The abovementioned ATDF bought the building in the early 1960s, and leased it out for long-term purchase to Kayondo and three others who became the first black Africans to own businesses on Kampala’s main street, and the “last man standing”, just about, of local manufacturers, by the late eighties.
They would occupy it for thirty-five years, religiously paying in their mortgage instalments to the Fund. That is until 1997, when the ATDF was targeted for divestiture as part of the Ugandan government’s implementation of IMF/World Bank –directed privatisations, which were carried out with all the proverbial passion of the neophyte. Meera investments, a sister company to Crane Bank, put in a bid for it, and the matter eventually ended up in the High Court.
In May 2000, within less than an hour of winning that High Court case, Crane Bank’s owners had the shops demolished.
The very emptiness, right next to a fallen example of the neo-liberal banking adventure, bears witness to a history the folly of denying to others what you cannot hold on to yourself.
Support The Elephant.
The Elephant is helping to build a truly public platform, while producing consistent, quality investigations, opinions and analysis. The Elephant cannot survive and grow without your participation. Now, more than ever, it is vital for The Elephant to reach as many people as possible.
Your support helps protect The Elephant's independence and it means we can continue keeping the democratic space free, open and robust. Every contribution, however big or small, is so valuable for our collective future.
East or West? What Africans Think of China and America
A majority of Africans favour democracy over other forms of governance but an authoritarian system with a capacity to deliver public goods rapidly on a vast scale cannot be dismissed off-hand.
That a major contest has kicked off between the US and China over their influence in Africa is now abundantly clear, an integral part of the monumental spat between the two superpowers that blew out into the open under President Trump — partly articulated in America’s 2017 National Security Strategy — but whose essentials are clearly being retained by the Biden administration. China is now considered America’s most significant geopolitical competitor and threat, a posture that is reciprocated by Beijing.
Still, it is also obvious that the US is racing to catch up with a China that has dramatically deepened and expanded its relations with Africa since the early 2000s. Ironically, just as the US was checking out of Africa in terms of trade and development and focussing instead on security — and in particular on the so-called “war on terror” — China shifted gear, especially through its giant Belt and Road Initiative (BRI). According to the conservative American Enterprise Institute’s China Global Investment Tracker, China has made a total value of US$303.24 billion in investments and construction in Sub-Saharan Africa since 2005. Indeed, by 2019 one in five major infrastructure projects in Africa was financed by China and one in three was being constructed by Chinese companies. China is now Africa’s biggest trading partner and, under President Xi Jinping, the country has rapidly expanded its cultural, social, military and other relations with African countries. In typical Chinese style, this scale-up has been both huge, efficient and rapid.
In East Africa, it is estimated that 55 per cent of all large-scale construction projects are undertaken by the Chinese who also finance a quarter of them. There has been considerable controversy about the extent to which these projects have contributed to a deepening debt crisis on the continent. The opacity and alleged corruption that surround the accumulation of this debt have also been the cause of deepening concern for policymakers and citizens alike. That said, the infrastructure projects align most closely with the African Continental Free Trade Agreement (AfCFTA) — currently our biggest “existential project” as Africans. The relationship between Africa and China is complicated. Indeed, relations with all great powers are complex and difficult for developing countries.
The Chinese model
A majority of African countries are aspiring democracies in one form or another. This democratisation stated after the 1989 fall of the Berlin Wall and by 1995, multiparty democratic constitutions had been promulgated across the continent. The US was a prominent driver of this process and at that point, the West’s push converged with the will of a majority of Africans exhausted by the single-party regimes and dictatorships that had ruled since independence. Today we can agree that the quality of this democracy varies considerably from country to country.
What is increasingly referred to as the “China model” is most obviously not a liberal democracy. All serious polling done by respected organisations such as Afrobarometer confirms that a majority of Africans continue to favour democracy — despite its messiness — over other forms of governance. I should think that this is in part because between independence and the early 1990s, Africa tried a wild assortment of authoritarian models of governance. These were stifling at best and disastrous at worst, especially when led by military cabals who had taken power through violent coups.
By 2019, one in five major infrastructure projects in Africa was financed by China and one in three was being constructed by Chinese companies.
The freedoms that have come with our democracies have in turn become embedded in our broader governance DNA, with our young population unable to conceive of a time when their basic freedoms of thought, speech, association, movement, etc., could be dramatically curtailed. And yet, the “China model” of an authoritarian system that combines a high level of state capacity to deliver public goods such as health, education, etc., to the majority of its people rapidly and on a vast scale cannot be dismissed off-hand.
On the African continent, the Rwandan and Ethiopian models have been compared to the Chinese model. The engagement with China, including its controversial debt-related aspects, has been transformative, especially in regard to the development of critical infrastructure. This cannot be argued with. And this transformation has taken place with unprecedented speed, changing skylines across a continent which has some of the world’s fastest growing cities and the world’s youngest, most rapidly growing population.
Still, the opacity and corruption that sometimes seems to typify the accumulation of commercial debt has been particularly troublesome in a range of developing countries around the world. This is still playing out and African countries are in the middle of a delicate diplomatic balancing act between a risen China, a giant and often thin-skinned partner, and a West that is now in aggressive competition with China. We are caught in between. Western nations are also increasingly vociferous in their complaints about human rights abuses in China. The human rights situation vis-à-vis minorities such as the Uyghurs of Xinjiang Province and the peoples of Tibet has for decades been the source of intense advocacy among human rights activists. The recent governance overhaul backwards in Hong Kong and apparently upcoming one in Taiwan have caused similar distress. Understandably, African policymakers have been profoundly circumspect about joining in these calls. This is despite the fact that African states have over the last 30 years gradually become less tolerant of gross human rights abuses on the continent. Coups are generally a no-no in this day and age, and a state that deliberately seeks to destroy an ethnic group would cause even the usually politically judicious African Union to voice strong opposition. This is in part because orchestrated mass violence against particular groups in one country inevitably spills across our fake borders. The 1994 Rwandan genocide was, and remains, profoundly chilling.
China has been steadfast in its policy of non-interference in the governance of other nations, a stance which is deeply appreciated by an Africa that is finding its voice. Supporters of democracy point out that this approach can sometimes end up propping up some of the most incompetent and dictatorial regimes on the continent. The West has its list of similar clients too though. Suffice it to say that China also retains currency among African elites because it has never been a colonial power on the continent despite China’s Admiral Zheng He (Cheng Ho) and his fleets visiting the East African coast several times between 1405 and 1433. China’s engagement with Africa back then contrasts starkly with Portuguese navigator Vasco da Gama’s blood-soaked expeditions in the region from 1497 as he sought a plunder route to India. From the 1950s onwards, China also contributed significantly to African liberation struggles, often in direct opposition to the US and its allies.
From the language and tone over the last few years, one would be forgiven for believing that the US is ready to adopt a Cold War posture with China. There is nothing that causes greater nervousness among African policymakers than the continent finding itself forced into the kind of stark polarity President George W. Bush encapsulated on the 20th of September 2001 when he told the world, “Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists”. This time around however, the relationship between China and Africa is very different from the one Africa had with the Communist bloc in the period after independence. Whereas ideology and the practicalities of the struggle for independence were at the heart of the Cold War relationship, for African elites in particular, China today is first and foremost a development partner. Besides, the Cold War posture was also generally bad for basic freedoms.
From the language and tone over the last few years, one would be forgiven for believing that the US is ready to adopt a Cold War posture with China.
Part of the challenge the US faces as it ramps up the contest with China is one of perceptions: the “shithole” countries, as President Trump called them, aren’t that shitty to other countries that have travelled the difficult development road we are on. For urbanised African youth with access to the internet, the America they view and read about today isn’t necessarily the one America’s unrivalled soft power juggernaut, Hollywood, portrays. A significant amount of bandwidth is instead taken up watching black people being murdered by a clearly systemically racist police force and the ensuing consequences. However, it is also part of the fundamental dynamism of US democracy that President Biden and his team have made so many progressive policy U-turns since taking office 100 days ago. Since he took office Biden’s administration has overseen the vaccination of over 130 million Americans – half the population!
Africans still overwhelmingly support the democratic model but feel the relationship with China is a win-win for Africa.
Other critical rising powers
While there has been considerable focus on China, India, Russia, Turkey and other rising nations have raised their profiles in Africa as well. They have done so without much fanfare but in a manner that has afforded local elites policy choices that were unthinkable as recently as the 2010s. The Russia-Africa Sochi Summit in late 2019, for example, was part of an accelerated engagement by Russia with Africa over the past decade especially in the extractive sector and military trade. Today Russia is by far the continent’s largest arms supplier, accounting for almost half of all military sales to Africa. In 2019, 12 African ministers of foreign affairs visited Russia, and that country’s long serving minister of foreign affairs, Sergei Lavrov, and his deputy Mikhail Bogdanov, held talks with nearly 100 top African politicians between January and September 2019 alone. Bogdanov is said to maintain sustained intensive interactions with African Ambassadors in Moscow. While Russian policymakers emphasise a deepening of “political cooperation” with Africa, they have indicated heightened interest in economic relations — especially in the extractive sector, agriculture, health and education. The speed with which Russia developed its Sputnik V vaccine was startling and its “vaccine diplomacy” in Africa has been more aggressive and successful than that of any other region. Welcome to our new multi-polar world.
What Africans think of China
As I said, Africans still overwhelmingly support the democratic model but feel the relationship with China is a win-win for Africa — with China winning more of course — being qualitatively different from the relationship with the West.
Afrobarometer recently polled African attitudes towards China in 22 countries including Ethiopia, Kenya, Senegal, Ghana, Guinea, Uganda, Nigeria, Angola, Namibia, Zambia among others. In the 22 countries, an average of 33 per cent of those polled thought the US was the best model for development. Twenty-three per cent felt China was the best model of development followed by former colonial powers at 11 per cent and South Africa at 10 per cent. China is emphatically the preferred model for development in Benin, Burkina Faso and Mali. In Liberia, Angola, Sierra Leone and Cape Verde the US is by far the preferred model. In Kenya 43 per cent of respondents prefer the US model compared to 23 per cent who prefer the Chinese model.
Importantly, 62 per cent of all those polled across Africa felt China has a largely positive economic and political influence on their countries while 60 per cent felt the same for the US.
Indeed, the main takeaways of the Afrobarometer report released in February 2021 include the fact that Africans feel generally positive about China. Significantly, according to the researchers,
“Though new on the block, the attractiveness of China’s development model is second only to the US (especially among older adults). Perceived Chinese influence is on a par with that of the US and well above that of the former colonial powers. Chinese economic and political influence is seen in largely positive terms. Respondents who feel positively about the influence of China also tend to have positive views of U.S. influence as well – suggesting that for many Africans, U.S.-China “competition” may not be an “either-or” but a “win-win” proposition. Popular awareness of China as a lender/giver of development aid to African respective countries is unmatched by the common place talk of Chinese “debt trap” diplomacy in Africa… Be that as it may, a plurality of Chinese loan aware Africans perceive fewer strings attached to those loans/development compared to other donors. Awareness of repayment obligations to Chinese loans/aid is however high among those who know about Chinese loans/aid to their country – suggesting the need for more information sharing about Chinese aid. Indeed, awareness of Chinese loans to the country generally goes hand in hand with expression of concern about the entailed indebtedness…”
The former top Singaporean diplomat, academic and author of Has China Won?, Kishore Mahbubani, argues that the COVID-19 pandemic has confirmed the shift of global power from West to East. He points out that from 1AD until 1820 the world’s largest economies were India and China and that the last 200 years of Western domination are a historical aberration. All aberrations ultimately end. We are living through these tectonic changes. Exciting times. Nothing expresses the contradictions that this means in our daily lives than the way our urban youth use their mobile phones and American platforms such as Twitter and Facebook as instruments of accountability in a complex age.
It is ironic too that the murder of George Floyd by a white policeman that caused such powerful global outrage last year was filmed by 17-year-old Darnella Frazier using her iPhone made in China and uploaded onto American social media platforms not allowed in China, provoking a powerful reaction that continues to reverberate around the world.
Do You Know What Is on Your Plate?
You may not know it but you’ve probably been ingesting carcinogenic, mutagenic and neurotoxic chemicals along with your ugali, sukuma wiki and kachumbari.
I had never really given much thought to what I ate and how it was produced. That is until, in the early 90s, an outbreak of Bovine Spongiform Encephalopathy – BSE, more commonly known as mad cow disease – led to the slaughter of 4.4 million head of cattle in the United Kingdom in an effort to contain the disease, and to a decade-long ban of British beef exports that ruined that country’s beef industry. The BSE outbreak is thought to have been caused by the practice of supplementing cattle feed with meat-and-bone-meal (MBM) rendered from the remains of other animals. The disease soon crossed over to humans through the consumption of BSE-contaminated beef, a new version of the neurological Creutzveld-Jakob Disease (vCJD) that took its first victim in May 1995 and has killed 177 people to date. In 2013 researchers reported that one in 2,000 people in the UK are carrying the human form of mad cow disease.
That same year, in February, a government livestock inspector was assassinated outside his home in the Belgian Flanders; Karel Van Noppen had been investigating the illegal trade in synthetic growth hormones that unscrupulous beef farmers were using to speed up the fattening of beef cattle and turn a quick profit. The use of synthetic growth hormones in cattle rearing has been found to have adverse effects on human health. I was living in Belgium at the time and I started asking myself what I had been eating. I wasn’t the only one; by the end of the decade, astute beef farmers were turning a tidy profit from the sale of organic beef to consumers like me who had become wary of the factory methods of production that had led to the BSE crisis.
With the appearance of organic beef on Belgian supermarket shelves, other organic produce soon followed and the shelf space dedicated to organic foods steadily grew. IFOAM-Organics International defines organic agriculture as “a production system that sustains the health of soils, ecosystems, and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Organic Agriculture combines tradition, innovation, and science to benefit the shared environment and promote fair relationships and good quality of life for all involved.”
Today, in the West at least, it is perfectly possible to eat, drink and even dress only organic; but you must have deep pockets because organic produce is more expensive than conventionally grown produce.
The right to adequate food is recognised in the 1948 Universal Declaration of Human Rights and is enshrined in the 1966 International Covenant on Economic, Social and Cultural Rights of which Kenya is a signatory. The Office of the High Commissioner for Human Rights of the United Nations clarifies that the right to adequate food implies that food must be available, accessible and it must also be adequate, meaning that “the food must satisfy dietary needs . . . be safe for human consumption and free from adverse substances, such as contaminants from industrial or agricultural processes, including residues from pesticides, hormones or veterinary drugs . . . .” The irony is that even though produce that is certified organic meets all of these requirements, it is not produced in sufficient quantities and where it can be found, it is beyond the reach of most consumers, whether they are in the West or here in Kenya.
Having jumped on the organic consumers’ bandwagon back in Brussels after the 1998 dioxin- contaminated chicken crisis finally convinced me to abandon conventionally-grown produce, I was keen to maintain the lifestyle once back in Kenya, only to find the limited choice of produce that is certified organic prohibitively expensive. I did the next best thing and decided to grow organic fruits and vegetables, both for my own consumption and for sale to the end consumer, and thus did I come into close contact with the world of farming.
City girl born and bred, and never having grown so much as a blade of grass, I needed all the help I could get and turned to Mr John Wanjau Njoroge, founder and director of the Kenya Institute of Organic Farming and a pioneer of the organic movement in Kenya. Mr Njoroge sent me a recently graduated young couple who set me on the road to organic farming. It has been a steep learning curve; after a first successful crop of greenhouse tomatoes, bacterial wilt decimated the second one.
Kenyan smallholder farmers produce 80 per cent of the 400,000 tonnes of tomatoes produced annually — representing 7 per cent of all horticultural produce grown every year — but commercial production of the fruit is fraught with difficulties; if it isn’t tuta absoluta, it is fusariam wilt, or if you’re really unlucky, it is both. And so, to control these and other pests and diseases, farmers reach for chemical pesticides and fungicides.
The trade in pesticides in Kenya is largely in the control of private sector distributors and retailers who import and distribute the products to the Kenyan end-user, but there appears to be a training deficit in the safe use of these chemicals. Farmers rely on agrovets and agricultural extension officers for information on pesticides, yet the Kenya Organic Agriculture Network (KOAN) has reported that “they are recommending pesticide products that are toxic to human health, bees and fish”.
An analysis of pesticide residues in tomatoes and french beans from Murang’a and Kiambu counties found the presence of omethoate in tomatoes, an active ingredient whose use in vegetables is banned in Kenya, suggesting “poor pesticide handling practices by some tomato farmers in the two counties”.
And the situation is not much better in Laikipia County where a 2019 study of pesticide application and pesticide residue levels in kales and tomatoes in the Ewaso Narok wetland found that the majority of farmers had no training in the use of pesticides. The study also found chlorpyrifos and diazinon residues in the tomatoes sampled; both these active ingredients are banned in the European Union.
It is particularly worrying that chlorpyrifos — a pesticide that is harmful to the brains of foetuses and young children — can still be found on the Kenyan market. Chlorpyrifos was banned in the EU in February 2020 but it is also one of the seven active ingredients in the pesticides and fungicides that were found by KOAN to be in use in Kirinyaga and Murang’a counties.
KOAN reports that “The pesticides withdrawn in Europe are mostly used on tomatoes (15 active ingredients), followed by kale (14), maize (14), cabbage (10), coffee (10) and french beans (6). Since tomatoes, kale, maize and cabbage are part of the daily Kenyan diet, there is a real and significant threat to food safety.” The study found that tomatoes had the highest toxicity score, followed by kales and maize, all foods eaten by Kenyans daily.
It is particularly worrying that a pesticide that is harmful to the brains of foetuses and young children can still be found on the Kenyan market.
But even more worryingly, KOAN reports having found high residue levels of acephate and methamidophos in the tomatoes sampled. Acephate, which has been withdrawn in Europe, is registered by the Pest Control Products Board for use on roses and tobacco. Methamidophos is not registered for use in Kenya.
The reason why active ingredients which have been withdrawn in the EU (or whose use is restricted) find their way to Kenya is because of the so-called Double Standard; EU Regulation EC304/2003 allows EU companies to produce and export to other countries pesticides that are banned or restricted in the EU, effectively protecting EU citizens while exposing non-EU citizens to the ravages of dangerous chemicals and infringing on their right to food that is safe for human consumption. Indeed, the United Nations Special Rapporteurs on Toxic Wastes and the Right to Food have found that “widely divergent standards of production, use and protection from hazardous pesticides in different countries are creating double standards, which are having a serious impact on human rights.”
And while the Rotterdam Convention requires an exporter based in an EU member state to indicate their intention to export banned or severely restricted chemicals to a non-EU country so that the latter is alerted, this arrangement is hypocritical and merely serves to enable EU companies to continue manufacturing dangerous chemicals for sale in non-EU countries while providing them with the ready excuse that importing countries are aware of the nature of the chemicals they are bringing in.
Domesticating the 1966 International Covenant on Economic, Social and Cultural Rights, Article 43 (1) (c) of the Constitution of Kenya 2010 states that, “Every person has the right to be free from hunger, and to have adequate food of acceptable quality.” In line with this last requirement, and in the face of the dangers presented by the poorly regulated trade in pesticides, the Route to Food Initiative (RTFI), Biodiversity and Biosafety Association of Kenya, Kenya Organic Agriculture Network and Resources Oriented Development Initiative petitioned the National Assembly in September 2019 to withdraw harmful pesticides from the Kenyan Market.
In their petition, they reported that there are products on the Kenyan market which are classified as carcinogenic (24), mutagenic (24), endocrine disrupter (35), neurotoxic (140) and many others which have been shown to have an effect on reproduction (262). The petitioners argued that, while the volume of imports of insecticides, herbicides and fungicides had grown 144 per cent between 2015 and 2018, there was no data available concerning pesticide use and its impact on food and the environment, and also noted that the increase in pesticide use had not been accompanied by the necessary safeguards to control their application.
The petitioners also said that by failing to publish information in its possession on the levels of pesticide residues in food samples collected, and to put in place a monitoring system, the Kenya Plant Health Inspectorate Service (KEPHIS) was acting in contravention of Section 15 of the Pest Control Products Act. The petitioners also accused the Pests Control Products Board (PCBP) of failing to adhere to the international codes of conduct of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO).
In its report on the petition tabled a year later in October 2020, the National Assembly’s Departmental Committee on Health responded that a blanket ban “without due consideration or risk assessment will not help, especially in the tropical conditions and areas experiencing an invasion of pests and diseases throughout the year.” The committee also argued that “severe limitation of the number of products available . . . will make sustainable use of plant protection products difficult, particularly managing the development of resistant pest populations.” The committee claimed that such a ban would threaten food security, lead to expensive food and reduced farmer incomes due to insufficient production.
The committee did however recommend that the PCPB develop regulations to ensure that only licensed and registered persons run agrovet outlets, and that the Ministry of Agriculture, Livestock and Fisheries undertake an analysis of the products on the Kenyan market in order to exclude those that are carcinogenic, mutagenic, neurotoxic and endocrine disruptors, and recommend the withdrawal from the Kenyan market of harmful and toxic pesticides. All this was to take place within 90 days.
Well, I visited two agrovets in our little township here in Nyandarua County who both told me that PCPB inspectors came calling last year to ensure that licence fees were paid and to ascertain that the products on their shelves had the PCPB logo indicating that they are authorised for sale in Kenya. Neither has been informed of any changes in the PCPB list of pest control products registered for use in Kenya and I could have bought pesticides and fungicides containing all but two of the active ingredients that KOAN found on produce in Kirinyaga and Murang’a counties: chlorpyrifos, which as I have mentioned above is harmful to the brains of foetuses and young children; diazinon, a neurotoxic organophosphate; permethrin, a neurotoxin that is also highly toxic to animals, particularly fish and cats; bifenthrin, which has been classified as a possible carcinogenic; and carbendazim, a mutagenic fungicide that can cause birth defects and damage fertility. These active ingredients — all of which are banned in the EU — are among the top ten most harmful ingredients in terms of toxicity for humans and the environment.
Route to Food, which has done a study on pesticide use in Kenya, notes that, “Pesticides can persist in the environment for decades and pose a global threat to the entire ecological system upon which food production depends. Excessive use and misuse of pesticides results in contamination of surrounding soil and water sources, causing loss of biodiversity, destroying beneficial insect populations that act as natural enemies of pests and reducing the nutritional value of food.”
If we are agreed that access to safe food is a human right, then we must reject food production methods that endanger our health and put our lives in peril, that pollute our water and our environment and jeopardise our biodiversity, methods that put the profits of the shareholders of companies domiciled in foreign countries before the wellbeing of Kenyan consumers.
It is ironical that Kenya goes to great lengths to meet the phytosanitary conditions and Maximum Residue Levels (MRLs) imposed by the EU – Kenya’s main market for horticultural exports – while at the same time exposing its own citizens to the dangers of toxic pesticides manufactured in the EU.
If we are agreed that access to safe food is a human right, then we must reject food production methods that endanger our health.
We are not condemned to remain on the path of industrial agriculture, which has proven to be so devastating to the environment and to human health. As Daniel Maingi notes, “Perhaps it is time we looked to nature and farmers’ know-how in using another branch of science called agroecology” which, as the Food and Agriculture Organization (FAO) has recognised, is “holistic, balancing focus on people and the planet, the three dimensions of sustainable development – social, economic and environmental – while strengthening the livelihoods of smallholder food producers.”
We must therefore be vocal in our support of the endeavours of organisations such as the Route to Food Initiative, Biodiversity and Biosafety Association of Kenya, the Kenyan Organic Agriculture Network and Resources Oriented Development Initiative, in order to ensure that the recommendations of the National Assembly’s Departmental Committee on Health do not remain a dead letter but form the basis of a fundamental change in the way we produce the food we eat.
How Biotechnologies are Shaping Kenya’s Food Ecosystem
Kenya has severally taken the top spot in “enabling the business of agriculture” annual rankings, opening its doors to patent-protected biotechnologies that could lead to the effective loss of our food sovereignty.
It has been said that he who controls the food, controls the people. But others have added that he who controls the seed, controls the food system. The race by multinational corporations (MNCs) to own and register patent protection on seeds and genetic traits, including DNA sequences, has led to a hierarchy of big players who now dominate the global markets through national and international legal instruments.
We have reached the stage where only four corporations dominate the global seeds and genetic traits markets, as they roll out patent-protected biotechnologies to both large and smallholder farmers worldwide. This is seen as a critical step in shaping food ecosystems here in Kenya and elsewhere in the world.
Power relations and roles in the biotech industry
During the last three years the world has witnessed spectacular mergers and acquisitions amongst the biggest actors in the industry — DowDuPont now Corteva, Bayer-Monsanto now just Bayer, and Syngenta/ChemChina. Together with BASF, these merged MNCs now control over 70 per cent of the global seed and pesticides market.
Their far-reaching wealth and power has been enabled by states and government actors working with global organisations such as the WTO (World Trade Organization) and UPOV (Union for the Protection of New Plant Varieties). The consequences have been a concentration of market share and influence, capital accumulation, and unprecedented economies of scale which have led to the marginalisation and the disinheritance of our common seed and genetic resources. The process of agricultural investment in so-called biotech innovation has come to be known as “the Green Revolution” or, increasingly now, the “Gene Revolution”.
Green Revolution (GR) is best understood as the wide-scale adoption and use of disruptive agricultural research and various technologies, including biotech, that are intended to increase agricultural productivity. Green revolutions therefore effectively convert farming and agriculture into an industrial system, because of the extensive adoption and use of new high-yielding seed varieties that often must be accompanied by the intensive use of mechanisation, large volumes of water and expensive irrigation infrastructure, pesticides, and fertilisers. The seed is a critical piece of GR and is the first portal to creating large-scale bio-economies, and imposing and enforcing patent and breeders’ rights protection through national and binding international laws.
The larger GR endeavour was initiated by Norman Borlaug. With funding from the Rockefeller Foundation, Borlaug helped develop high-yielding dwarf varieties of rust-resistant wheat. The Green Revolution’s early success in India was led by the agricultural scientist M. S. Swaminathan. He is known as the “Father of Green Revolution in India” for his role in introducing Borlaug’s dwarf varieties of wheat and rice in India. One of the impacts of this green revolution was that the yields of wheat and rice doubled, but the production of other food crops such as indigenous rice varieties, sorghums, millets, and pulses declined. This led to the loss of distinct indigenous varieties from cultivation and also caused the extinction of others.
Seed biotechnologies have profoundly changed consumption patterns over the years; the dietary diversity of India’s population has decreased as Indians eat more wheat and rice devoid of nutritive value. Studies have shown that traditional coarse cereals (complex carbohydrates, high protein) have been permanently replaced by more white wheat and polished rice diets (simple carbohydrate, low protein), with the accompanying effects of obesity and malnutrition. An overweight population (BMI>25) has emerged as a new public health challenge, and this is most evident in large-landholding households, especially in the high-input agriculture areas.
In Africa, the first green revolution was a failure and efforts have been underway for a relaunch. The Alliance for a Green Revolution in Africa (AGRA) was founded in 2006 to bring high-yield agricultural practices and biotechnologies to millions of smallholder farming households. Bill Gates has an absorbed relationship with the wonder of computers and technologies. Fascinated by the possibilities of big data and biotechnologies as the centerpiece for a new disruptive revolution in Africa’s agriculture, Bill Gates, through the Bill & Melinda Gates Foundation, together with partners including the Rockefeller Foundation, have collectively pumped more than US$1 billion in funding to the Nairobi-based AGRA.
Indians now eat more wheat and white rice devoid of other nutrients that used to come from the inclusion of sorghum, millet and mung beans in traditional diets.
To the delight of agribusiness corporations, GR means an expansion in the use of new biotech seeds, fertilisers, pesticides and, of course, irrigation infrastructure and the related mechanisation. To ensure that new seed technologies are adopted and used on a larger scale, Bill Gates has also channeled significant funding to entities such as the African Agricultural Technology Foundation (AATF), African Seed Trade Association, Kenya’s seed trader associations, and private companies. The goal is to influence and catalyse the transformation of agriculture policies and legislations and open up Kenya for commercial agriculture.
Together with the World Bank, the Gates Foundation has funded local stakeholders to lobby and advocate for reforms to remove “obstacles” in policies, laws, and regulations in agriculture, in what they term as “enabling the business of agriculture” (EBA). The annual ranking of countries is closely watched by investors and used by the World Bank, USAID, DfID, and other bilateral donors, to guide their funding. As a result, EBA drives the race to deregulate. Governments in poor countries compete with each other to “reform and change their agricultural laws” so that they can be ranked among the “Doing Business” best performers. Kenya’s performance in these rankings is also keenly followed by pro-biotech advocacy lobby groups.
The technology is the seed
Seeds carry the genetic traits or DNA sequences claimed as proprietary rights by the breeders or corporations that control them. The technology is in the seed and is the seed. Through stewardship agreements, farmers purchase seed, promise and sign on the dotted line that they are merely renters of the biotechnology and not owners. As such, they cannot multiply that seed for replanting; new seed must be purchased. They can also not store, give to others or even sell their harvested seed. Failure to adhere to these terms is a violation punishable by national and international laws. This means that MNCs are effectively controlling what food ecosystems emerge once a country decides to rely on biotech-gene seeds. It is an effective loss of food sovereignty and an abuse of farmers’ rights to seed, including the right to food at the household level.
Unfortunately, there have been many incidences where seed corporations systematically replace indigenous seeds with their proprietary hybrids through “generous donations”. After a few seasons, faced with a lack of alternative sources, the users must purchase patent-protected seeds.
Such is the case of the recently rolled-out Bt. cotton hybrids in Kenya. Dubbed first-generation biotech crops, Bt. traits focused on increasing market share and profits to patent holders by promising to eliminate the need for pesticide sprays against a limited range of insects. Another GM crop resistant to Round-up herbicide sprays caused enormous increases in Bayer’s sale of its herbicide, resulting in massive increases in market dominance. Once these crops become entrenched in the market and food ecosystem, farmers are often faced with a serious challenge as there are no alternative versions from other competing companies. In Kenya — as in India — Bayer-Mahyco has absolute power and market control, a situation enabled by the government with little public discourse.
Through stewardship agreements, farmers must purchase seeds and promise by signing on the dotted line that they are merely renters of the seed and not owners.
In the second-generation biotech crops, there was a focus on the traits desired by farmers, and much of the research was funded by public-private partnerships, as opposed to being funded only by the private sector, as was the case for first-generation GMOs. Virus-resistant cassava and sweet potato, together with GM banana in Uganda, are candidates in the former category, which is seen as an attempt by MNCs to repair their public image with the help of philanthro-capitalists like Bill Gates. These Biotech crops are vegetatively propagated (not grown from seed), and are not amenable to traditional plant breeding, creating an opening for a GM approach. Critically, vegetative propagation also means that farmers do not need to repurchase seed every year. What effect these second-generation feel-good biotech crops will have on the food ecosystems is yet to be ascertained. Second-generation GMOs in agriculture include “functional” plants designed to produce pharmaceuticals, fuels, and industrial compounds. It is doubtful that these new biotechnologies will have a role in Kenya’s food ecosystem.
The future of GR in Kenya’s food system
In India, GR technologies were rolled out in 1967 when dwarf and rust-resistant wheat varieties were released. The results were so fast and so significant that, just three years later, Norman Borlaug was awarded the Nobel Peace Prize in 1970 in recognition of his contributions to world peace through increasing food supply. It is claimed that he saved a billion people from starvation.
In Africa, it has now been 15 long years since the new GR was launched. AGRA pledged in self-declared milestones that it would double the earnings of 20 million small farmers by 2020 while halving food shortages in 20 African countries. A Tuft University study found little evidence of significant increases in productivity, income, or food security for people in the 13 main AGRA target countries, but rather, demonstrated that AGRA’s Green Revolution model is failing. Between 2013 and 2015, AGRA and CIMMYT released at least 25 water-efficient drought-tolerant maize hybrids (WEMA) for farmers in Kenya. To date, there have not been any magical yield increases as was evident in India when the hybrid wheat and rice varieties were released. Despite the widespread use of these biotech varieties, the increased use of pesticides and fertilisers, and the extensive use of tractors, GR remains a dream in Kenya’s food economies.
There have been many incidences where MNCs systematically replace farmers’ own indigenous seeds with their proprietary hybrid seeds by providing “generous seed and fertiliser donations”.
Why is it so difficult to ignite a green revolution in Africa? AGRA has funded projects and lobbied African governments for the development of policies and market structures that promote the adoption of Green Revolution technology packages. Kenya has taken the top spot in enabling the business of agriculture, opening its doors to these biotechnologies. It has won praise and accolades from donors and partners. What else is there to be achieved? It is highly doubtful that affixing Bayer’s Bt. insect toxin gene to the drought-tolerant WEMA (now TELA) trait will be the launch of Kenya’s green (maize) revolution. It is also highly uncertain that Kenyans will suddenly change their modern dietary habits and start eating biotech cassava, engineered, not for high yields, but to resist viruses.
There is a wave of “new genetic modification techniques” touted to lead to the third generation of GMOs. These include genome editing using various tools such as special enzymes to cut, repair, or even bring new segments into the DNA of living food organisms. Such technics appear to be science visioning, with biotech supporters saying that one will be able to delete allergy traits from the DNA of peanuts and make lactose-free milk to the joy of lactose-intolerant populations. These modification techniques have already been tested out in the current roll-out of mRNA-mediated covid-19 vaccines, and appear poised to make a thundering entrance into Kenya’s and Uganda’s food ecosystem through cassava that is protected against viruses. Noteworthy is that citizen resistance against this GMO technology will be met with a stern and stark reminder that it is the same GM technology that was used to protect us from the coronavirus and its associated mutations. The new GM technology skipped many important safety and risk assessments and the vaccines were released under public emergency orders worldwide.
In 1967, Norman Borlaug’s GR varieties undoubtedly averted food shortages albeit temporarily. But they were unable to deter poverty. In fact, GR technologies might have added to it. The high-yielding seeds demand expensive fertilisers and more water. In India, GR led to rural impoverishment, increased debt, social inequality, and the displacement of vast numbers of peasant farmers.
What then must we do to ensure a just and equitable food system in Kenya? What is the way forward for gene and green revolutions in Kenya? It appears that our experts and technologists have had every room and resource to make Kenya food-secure using all forms of modern biotechnologies yet there have been no significant results to phone home about. Perhaps it is time to cut our losses and shirk the industrial-agricultural model that is based on industrial principles. Climate change is not helping Kenyan farmers. Researchers have been unable to come up with solid biotechnologies that can sustainably overcome stresses from our unique harsh farming climates. Perhaps it is time we looked to nature and farmers’ know-how in using another branch of science called agroecology.
GR agriculture increased farmer debt, which resulted in increased social inequality, and the displacement of vast numbers of peasant farmers who had to make way for larger farms.
Agroecology encourages the building of resilience through crop and varietal biodiversity on the farm. Monocrops are to be avoided to reduce pests and diseases. Farmers and extensionists teach that planting mixed varieties of locally adapted maize on the same farm creates resilience against pests like stem borers and fall armyworms that GMO Bt. maize seeks to control. Farm-level diversity is the key to survival. Seeds with many traits – drought resistance, early ripening tendencies – make for greater ability to adapt to climate change. Relying on just a few varieties is dangerous and making unending royalty payments to the holders of those food varieties is worse as it undermines food sovereignty at the farm level.
Agroecology encourages the defense of farmers’ rights, the rights to nature, and demands the renegotiating of the contract between state and society as stipulated in our 2010 constitution. Farmers have a right to seed for food and livelihoods. They should be able to freely keep, further develop, sell or even gift their planting material as is culturally accepted. The government should be at the forefront of protecting their rights – and not creating skewed power relations between farmers and farm input providers.
Good agroecology practices further demand an accelerated shift towards local food production and short supply chains. The emphasis is on local food sufficiency that encourages ethical consumerism.
There is an urgent need to review, reform, and reconfigure the UN’s agri-food agencies to be more responsive to the poor and disadvantaged in the food system. The FAO (Food Agriculture Organization) and the CGIAR (Consultative Group on International Agricultural Research) have received funding from the World Bank and the Bill & Melinda Gates Foundation, swaying research and policy priorities towards more biotechnologies in our food systems. Dr Agnes Kalibata, President of AGRA and board member of the International Fertilizer Development Center, has been appointed as the UN Secretary General’s special envoy to the 2021 UN Food Systems Summit to be held in September 2021. This signals that the summit will be yet another forum that advances the interests of MNCs and agribusiness at the expense of farmers.
It is time to put the seed back into the hands of the farmers. Remember, he who controls the seed controls the food system. If Kenya is to take back control of its food system and reassert its sovereignty over its agriculture, its citizens — free from corporate influences — must be at the forefront of any restructuring of the food system. This is the only path to a just and sustainable food bio-economy that is not subject to the whims and fancies of corporate controllers of biotechnologies.
Politics1 week ago
The Extraordinary Journey of J. P. Magufuli and Comparative Perspectives of Dog-Eat-Man Regimes
Reflections2 weeks ago
Of Chapati, Identity and Migrant Politics in Europe
Politics2 weeks ago
Will an Unga Revolution Follow in the Wake of the Coronavirus?
Politics2 weeks ago
It Is Time for the Agro-Queer Conversation
Op-Eds2 weeks ago
Another False Start: The Green Revolution Myths that Africa Bought
Politics2 weeks ago
Blood on the Tea Leaves: Kenyan Workers Demand Reparations From Unilever
Politics2 weeks ago
Indian Farmers Protests Continue Amid COVID Surge
Long Reads1 week ago
Unrecognized Vote: Somaliland’s Democratic Journey