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The Turbulent 2010s: Rising Economic Disequilibrium and Shifting Global Hierarchies and Hegemonies

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The tens were a turbulent decade characterised by six key trends: the globalization of tribalism; democratic recessions and resistance; rising economic disequilibrium; shifting global hierarchies and hegemonies; the emergence of surveillance capitalism; and finally, the rebellion of nature.

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The Turbulent 2010s – Of the Globalization of Tribalism and Democratic Recessions and Resistance?
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The aftermath of the Great Recession of 2008-2009 was one of the defining economic developments of the 2010s. It was precipitated by financial crisis in the United States, which was triggered by the collapse of the subprime housing market bubble. It became the deepest and longest recession in the country’s history since World War II. The financial crisis has been attributed to lax public monetary policy, slack regulation of financial institutions, high levels of household and corporate debt, international trade imbalances, and poor corporate governance and accountability. For example, in the United States household debt rose from 77% of disposable income in 1990 to 127% in 2007. In some European countries, such as Denmark, Iceland, Ireland, the Netherlands, and Norway such debt even surpassed 200%.

The Great Recession left a trail of wanton economic devastation mostly in the United States and Europe. In the US, between 2007 and 2009, real GDP declined by 4.3%, the S&P 500 index dropped by 57%, unemployment rose to 10%, home prices fell by 30%, the poverty rate jumped to more than 15% of the population, and the net worth of American households and nonprofit organisations fell by 20%, from $69 trillion to $55 trillion. In some European countries, such as Cyprus, Greece, Ireland, Italy, and Portugal, the crisis became so severe that they were forced to default on national debt and seek bailouts from the European Union, European Central Bank, and the International Monetary Fund.

To contain the contagion and revive growth, many governments enacted fiscal stimulus packages, and austerity measures comprising tax increases and reductions in social benefits programmes. For their part, central banks cut rates and adopted quantitative easing, an expansionary monetary policy of injecting liquidity into the economy by buying assets. Rates of recovery in the 2010s were predictably slow and uneven, and varied by country and community, as well as the eternal structured inscriptions of class, ethnicity/race, and age.

It is generally agreed the Great Recession accelerated the growth of economic and social inequalities in the United States and around the world. This was one of its major consequences. Tens of millions of people lost their jobs, assets, and livelihoods, as well as control over their lives, dignity, and hope for the future. The policy responses favoured capital over labour, the wealthy at the expense of the middle and working classes, financial services over productive sectors. Fear, uncertainty, rage, and distrust of governments captured by business and often self-serving elites flared into a political and social inferno in many countries.

This is the combustible brew that greeted the 2010s, spawning widespread political instability and social struggles that gave rise to toxic tribalisms and populisms that were most effectively mobilised and manipulated by right-wing forces, as well as heightened recessions of, and resistances for, democracy, examined in the previous sections.

Employment was particularly battered. Employment trends during the 2010s reflected rates and patterns of economic growth and changing economic organisation. According to the ILO’s 2019 World Employment Social Outlook, from 2011-2018 the world economy grew at an average rate of 3.6%, a slight dip from 3.9% in 2001-2010. The percentage of the working age population in employment fell during the Great Recession and its immediate aftermath, and rose slowly thereafter, although by 2018 it was down to 58.4% compared to 62.2% in 1993. The majority of jobs were in informal employment, which in 2016 accounted for 2 billion jobs or 61% of all jobs. In terms of sectors, the share of manufacturing employment generally fell, while that of services rose and by 2018 the latter accounted for almost half of all employment.

Working conditions in both informal employment and services including the emerging gig economy largely remained poor. Nearly 700 million workers in low and medium income countries in 2018 lived in extreme or moderate poverty. The deficits in decent work remained alarmingly high, afflicting the majority of the 3.3 billion people employed globally, who suffered from persistent economic insecurity, and lack of equal opportunities for their wellbeing. Average real wage growth remained low and fluctuated, rising in some years and falling in others.

The unemployment rate in 2018, at 5%, was the same as in 2008, and lower than the 5.6% in 2009. Also evident was the prevalence and in some cases growth of underemployment or labour underutilisation. Needless to say, employment rates and conditions varied quite considerably according to levels of development, gender, and for the youth. Overall, employment indicators tended to be worse for low-income than high-income economies, and those in between, and in terms of gender for women compared to men, and were particularly challenging for the youth.

Nearly 700 million workers in low and medium income countries in 2018 lived in extreme or moderate poverty

For many countries, employment was a key feature of the difficult aftermath of the Great Recession and played an important role in engendering and sustaining income and wealth inequalities. Reports on growing global inequalities within and across countries abound in the academic literature, media, publications of development agencies, think tanks, and NGOs.

For example, according to Credit Suisse’s Global Wealth Databook 2018, 64% of the world’s adult population held less than 2% of global wealth, while less than 10% of the wealthiest individuals owned 84% of global wealth, and the richest 1% owned 45%. The growth of high net worth individuals—those with net worth assets of more than $1 million—was staggering.

While the largest numbers of the world’s high net worth individuals (HNWIs) were in the United States (41% in 2018), Europe, and China (7%), they rose even faster in Africa, the world’s least developed continent. According to the World Wealth Report 2018, the size of HNWIs in Africa in 2017 reached 169,970 who had a combined wealth of US$1.7 trillion (0.9% out of the 18.1 million HNWIs globally and 2.4% out of $70.2 trillion global HNWI wealth).

64% of the world’s adult population held less than 2% of global wealth, while less than 10% of the wealthiest individuals owned 84% of global wealth

Oxfam did much to publicise the scourge of growing inequalities in a series of alarming reports published to coincide with the World Economic Forum, the Davos jamboree of masters of the universe. Its report in 2015 showed the richest 1% increased its share of the world’s wealth from 44% in 2009 to 48% in 2014, while the least well-off 80% owned just 5.5%. In its 2017 report, entitled Economy for the 99%, it bemoaned the fact that eight multi-billionaires owed as much wealth as the poorest half of the world’s population. Its 2019 report claimed the wealth of 2,200 billionaires worldwide grew by 12%, while for the poorest half it fell by 11%.

Oxfam blames the obscene disparities on capital squeezing workers and producers while executives are grossly overpaid, crony capitalism and state capture, super-charged shareholder capitalism, and tax avoidance by the rich. As might be expected, the debate on global inequalities is extremely heated. Inequality received its intellectual imprimatur in Thomas Piketty’s academic blockbuster, Capital in the Twenty-First Century, published in 2013 that offered a voluminous and compelling account of wealth and income inequality in the United States and Western Europe over the last three centuries.

Piketty’s bestselling book received as much acclaim as criticism for its thesis, methodology, and conclusions underscoring how high the stakes are. In a lead story in its issue of November 30, 2019 The Economist, the haughty British magazine, returned to the topic with a predictable verdict, “Inequality Illusions.” It argues that the idea of soaring inequality rests on shaky analytical grounds and problematic data. Nevertheless, the magazine still conceded, “And even if inequality has not risen by as much as many people think, the gap between rich and poor could still be dispiritingly high.”

The richest 1% increased its share of the world’s wealth from 44% in 2009 to 48% in 2014, while the least well-off 80% owned just 5.5%

In the 2010s several global income inequality databases were created, such as the World Bank’s PovcalNet, the World Inequality Database, the OECD’s Income Distribution Database, the University of Texas Inequality Project Database, and The United Nations University’s World Income Inequality Database. Each focuses on a particular set of issues. Much of this work is reflected in the UNDP’s  Human Development Report 2019, which makes sobering reading.

The report offers five key observations. “First, while many people are stepping above minimum floors of achievement in human development, widespread disparities remain”; “Second, a new generation of severe inequalities in human development is emerging, even if many of the unresolved inequalities of the 20th century are declining”; “Third, inequalities in human development can accumulate through life, frequently heightened by deep power imbalances”;  “Fourth, assessing inequalities in human development demands a revolution in metrics;”; and “Fifth, redressing inequalities in human development in the 21st century is possible—if we act now, before imbalances in economic power translate into entrenched political dominance.”

The report urges the development of a new framework for analysing inequality that goes beyond income (“A comprehensive assessment of inequality must consider income and wealth. But it must also understand differences in other aspects of human development and the processes that lead to them”); beyond averages (“The analysis of inequalities in human development must go beyond summary measures of inequality that focus on only a single dimension”); and beyond today (“Inequalities in human development will shape the prospects of people that may live to see the 22nd century”).

In the 2010s, concerns over inequalities in income, wealth, capabilities and opportunities became widespread across political divides. While gaps in basic capabilities (such as access to basic education and health) across the world narrowed, they grew in terms of enhanced capabilities (including life expectancy at older ages and access to tertiary education). In the words of the UNDP report, “In all regions of the world the loss in human development due to inequality is diminishing, reflecting progress in basic capabilities.”

Photo by Milo Miloezger on Unsplash

Globally, the loss fell from 23.4% in 2010 to 20.2% in 2018, ranging from 35.1% to 30.5% for sub-Saharan Africa, on one end to 16.1% to 11.7% for Europe and Central Asia on the other. The percentage with primary and secondary education grew more rapidly that tertiary education between 2007 and 2017 in all world regions. For sub-Saharan Africa it grew by about 9% and less than 2%, respectively, so that by 2017 more than 40% of the population had primary education compared to 2% with tertiary education. The ratios for the developed countries were more than 95% and 25%, respectively.

But not everyone benefited equally in the rising provision of basic capacities as millions of vulnerable populations remained trapped in the insidious horizontal inequalities of discriminatory policies and restrictive legal frameworks, and the dynamics of deeply entrenched historical, market, cultural, and gender biases that blocked them from meaningful and ameliorative social, economic and political participation.  The UNDP report calls for more refined and timely studies of inequality using universally recognised statistics and comprehensive inequality databases.

The Great Recession did not affect all world regions equally. As noted above, many developing countries largely escaped its worst effects, although they experienced slower growth. Many of the economies in South America went into recession reflecting reduced demand in their main North American and European markets for their predominantly primary commodity exports.

Economic growth continued in much of Africa, save for countries like South Africa that went into recession, but at lower rates than before. This reflected the resilience of the continent’s recovery since the 1990s and the reorientation of its major trading partners from the western countries to the rising economic giants of Asia, especially China and India, where growth remained robust, as it was in Indonesia and Bangladesh. For its part, South Korea barely escaped recession.

The uneven effects and limited impact of the Great Recession on China and India pointed to an emerging phenomenon in the world economy that accelerated in the 2010s, namely, the decoupling of growth trajectories between the historically dominant economies of Western Europe, the United States, and Japan and the emerging economic powerhouses of the 21st century. This is another major consequence of the Great Recession which became more apparent in the 2010s and is leading to the reshuffling of global hegemonies and hierarchies, which will be discussed in the next section.

While the heady projections of the future made in the late 2000s and early 2010s for some of the emerging economics in the BRICS (Brazil, Russia, India, China, and South Africa) and other configurations (MINT—Mexico, Indonesia, Nigeria, Turkey; and Next 11–Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea, and Vietnam), have faded, the fact remains that these economies assumed a much greater share of global economic output, a trend that continued in the 2010s.

For example, as I noted in my book on Africa’s Resurgence referred to earlier, between 1990 and 2012 the relative share of the BRICS of World GDP increased by some 3.6 times so that they accounted for 56% of world GDP growth. By 2012 the BRICS claimed about 20% of world GDP compared to 24% for the European Union and 21% for the United States. The BRICS accounted for 43% of world reserves of foreign exchange, and increased their share of total world trade to 21.3% as compared to 25% for the EU and 27% for the US.

Shifting Global Hierarchies and Hegemonies

Clearly, global hegemonies and hierarchies shifted in the 2010s at global and regional levels. In terms of intra-regional shifts, World Bank data shows that, in Africa, Nigeria overtook South Africa to become the continent’s largest economy in 2012 ($459.4 billion to $396.3 billion in current US dollars). In East Africa, Ethiopia overtook Kenya as the largest economy in Eastern Africa in 2015 ($64.6 billion to $64.0 billion). In terms of purchasing power parity (PPP), by 2018 the size of the Nigerian economy was $1,117.4 billion compared to South Africa’s $768.3 billion, while it was $219.0 billion for Ethiopia and $176.4 billion for Kenya. In PPP terms, in 2018 Egypt’s economy was actually the continent’s largest, at $1,189.0 billion.

An even more remarkable development during the 2010s was the rising share of the global economy by middle-income countries. According to a World Bank report, from the 2000s to the mid-2010s their share rose from 17% to 35% (4% to 8% for lower middle-income countries and 13% to 27% for upper middle-income countries). In the meantime, the share of global GDP by higher-income countries declined from 83% to 64% during the same period. In terms of purchasing power parity, in 2018 the middle-income countries claimed 53.6% of global GDP ($72.7 trillion out of $135.5 trillion). The respective shares for the lower middle-income and upper middle-income countries was $22.9 trillion and $49.7 trillion, which translated into 16.9% and 36.7% of the global economy, respectively.

The biggest economic story of the decade, indeed, the last thirty years was the exponential rise of China. In terms of purchasing power parity, China overtook the United States as the world’s largest economy in 2014. By 2018, the size of the Chinese economy towered at $25.3 trillion, compared to $20.7 trillion for the American economy, although in terms of per capita incomes the latter was still ahead—$63,390 compared to $18,140. China’s re-emergence as the world’s largest economy returned the country to a position it had enjoyed a few centuries before. This phenomenal growth enabled China to lift hundreds of millions of people from poverty, an achievement almost unparalleled in human history.

The story of China is an integral part of Asia’s resurgence into the world’s economic center, and the historic decline of Europe and North America that have been dominant since the first industrial revolution. In 2018, the five leading Asian economies, China, India, Japan, Indonesia, and South Korea, accounted for 34.5% of the world economy. By the end of the 2010s, four Asian countries were among the top ten economies in the world: China ($25.3 trillion in 2018), the United States ($20.7 trillion), India ($10.4 trillion), Japan ($5.6 trillion), Germany ($4.6 trillion), Russia ($3.9 trillion), Indonesia ($3.4 trillion), Brazil (3.3 trillion), France ($3.1 trillion), and the United Kingdom ($3.0 trillion).

Africa seemed nowhere near achieving Asia’s extraordinary feat, although it became popular in the 2010s to celebrate Africa Rising/Rising Africa. The new rhetoric of Afro-optimism clearly sought to countervail the Afro-pessimism rampant during the continent’s “lost decades” of the 1980s and 1990s. The media often trumpeted that six or seven of the world’s ten fastest growing economies were in Africa. In 2018 there were five (Guinea, Côte d’Ivoire, Libya, Ethiopia and Senegal).

But the reality is that no African country has yet to achieve decades of high and sustained economic growth experienced in Asia. This is clear from the fact that the list of Africa’s fastest growing economies shifts every so often. Many of the Asian tigers consistently achieved growth rates that were far above population growth for three decades or more. According to data from the International Monetary Fund, Africa’s growth rate, which reached 6% in 2005 fell to 5.8% in 2010, to 3.5% in 2015, and rose slightly to 3.8% in 2018, remained too low to achieve profound transformation in human development. It is instructive that Africa’s growth rates during these years were below the averages for the developing economies as a whole (7.2% in 2005, 7.4% in 2010, 4.3% in 2015 and 4.9% in 2018).

The rise of Asia, led by China, which was consolidated in the 2010s, has generated an extensive literature. This historic transformation has been attributed to all sorts of complex historical, political, socio-economic, and geopolitical factors and forces. It is possible to argue that after World War II, and for some after independence, Asian countries constructed far more cohesive and strategic developmental states, undergirded by inclusive economic, political, and social institutions, and massive investments in human capital development, than other regions in the global South. Also, they aggressively pursued state capitalism, which was reinforced following the Asian crisis of 1997, in the face of fierce opposition and often misguided advice from the gendarmes of the Washington Consensus of neo-liberal free market fundamentalism.

The biggest economic story of the decade, indeed, the last thirty years was the exponential rise of China

It was quite clear that the 2010s witnessed historic shifts in global power from EuroAmerica to Asia in general, and from the United States as the sole post-Cold War superpower to fierce hegemonic rivalry with China, the ascendant superpower of the 21st century. One British academic and journalist, Martin Jacques goes so far as to argue in a recent commentary in the British newspaper, The Guardian, that “This decade belonged to China. So will the next one.” He noted that “Prior to the western financial crisis, it had been seen as the new but very junior kid on the block. The financial crash changed all that,” which had huge consequences for the western world’s “stability and self-confidence.”

The West, Jacques continues, has displayed “a kaleidoscope of emotions from denial, dismissal and condemnation to respect, appreciation and admiration; though there is presently much more of the former than the latter. The rise of China has provoked an existential crisis in the US and Europe that will last for the rest of this century. The west is in the process of being displaced and, beyond a point, it can do nothing about it.” Particularly galling has been the rise of China from a technological copycat into an innovation juggernaut for the defining technologies of the 21st century through its $300 billion “Made in China 2025” plan. The country has also moved from a cautious global player into a more assertive power through its ambitious belt and road initiative, targeted at the developing world and designed as the harbinger of a new world order.

The 2010s represented the beginning of a historic hegemonic shift in the world system. Such shifts are very rare in world history. This is the third potential shift in the last three centuries. The first was in the late 19th and early 20th centuries that pitted Britain, the world’s first industrial nation, and Germany the rising continental European industrial power. It culminated in World War I. The second arose out of the ashes of World War II that saw the devastated imperial powers of Europe replaced by two new superpowers, the United States and the former Soviet Union. As I noted in a longer paper on current hegemonic rivalries, such moments often reflect and are accompanied by profound political, economic and structural crises and changes.

Deluged by the cacophony of daily news, it is easy to get distracted by the endless punditry in the media and the pronouncements of American and Chinese leaders, especially with America’s unconventional and unhinged president with his tweeter storms. At stake is the demise of the post-World War II order that the USA created and disproportionately benefitted from. The decomposition of this order antedated Presidents Donald Trump and Xi Jinping, and will outlive them. The US and Chinese economies are so intertwined that decoupling will be extremely costly to both countries, and to the rest of the world. But hegemonic transitions have their own logic that often defies the cold calculus of costs. The 2020s will tell where the bitter rivalry between the declining and rising superpowers is headed. The rest of the world will be forced to adjust accordingly.

The latest issue of The Economist (January, 2020) offers a fascinating portrait of China’s breathtaking technological advances. It shows the progress Chinese companies have made in older and imported industries including nuclear reactors, high-speed railways, electric cars, and laser technologies. The country has also gradually moved up in the microprocessing value chain, and is investing heavily in robotics, the internet of things and artificial intelligence. In some areas China is working hard to become a global leader, such as in 5G technology, or is already ahead, for example in the application and use of face recognition technologies. The latter technologies are a double-edged sword, as they facilitate the enforcement of state digital espionage—what some call algorithmic surveillance, whose implications for human rights and individual freedoms is portentous.

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Paul Tiyambe Zeleza is a Malawian historian, academic, literary critic, novelist, short-story writer and blogger.

Ideas

Africapitalism’ and the Limits of Any Variant of Capitalism

Stefan Ouma provides a critical account of Africapitalism as well as an assessment of the future/s it imagines, what it silences and its potential to transform African economies. Ouma concludes that the ecologically destructive and dehumanising architecture of our global economic system provides further evidence to condemn any variant of capitalism.

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In 2019, Tanzanians mourned prominent businessperson Ali Mufuruki (1959-2019). Under the umbrella of his InfoTech Investment Group, he championed the cause of indigenous ownership of businesses in the country. He was successful at his trade, representative of a group of ‘Tanzanians of African origin who have been the voice of the private sector during – and since – the transition to liberalization in the 1980s/90s.

He was also an ‘ideational entrepreneur’ who promoted the structural transformation of African economies to engender less extraverted and extractive forms of development. With the aim to safeguard the ‘gains of liberalization’, he co-founded and chaired the CEO Roundtable of Tanzania (CEOrt), providing a forum for industry leaders to constructively engage the government on policy issues. Together with his fellow countrymen Rahim Mawji, Moremi Marwa, Gilman Kasiga, he published a book to which the President himself, John Pombe Magufuli wrote the foreword: Tanzania’s Industrialisation Journey, 2016-2056: From an Agrarian to a Modern Industrialised State in Forty Years (2017).

Mufuruki also spread his ideas in a TED talk, where he debunked the myth of ‘Africa rising’ with great verve, as some critical political economists have also done. Yet despite being touted as an ‘intellectual of capital’ by historian Chambi Chachage, you won’t find the term capitalism mentioned in Mufuruki and colleagues’ book other than when another cited author uses the term. Instead, less suspicious terms such as ‘the market’ and ‘the private sector’ are put to use. After all, upebari (capitalism) and mapebari (capitalists) are still terms used widely with a negative connotation in a country where socialism is still enshrined in the constitution.

In contrast, in Nigeria, another intellectual of capital, Tony Elumelu, was far less hesitant to mobilise the vocabulary of capitalism for his purposes when he came up with the term Africapitalism in 2011. Since then, the notion has become a popular hashtag in social media, and now garnishes the titles of at least three books (Edozie 2017Idemudia and Amaeshi 2019Amaeshi et al. 2018).

Like Mufuruki, Elumelu is someone for whom capitalism has worked very well, having turned the Nigerian United Bank of Africa (UBA) into a pan-African player in the 2000s. He is now the board chairman of Heirs Holding, a pan-African private equity firm based in Lagos. For the past ten years, he has also headed a large philanthropic enterprise dedicated to fostering entrepreneurship across the continent.

Like Mufuruki, Elumelu is representative of ‘Africa’s new, burgeoning capitalist class’ – a new crop of African entrepreneurs who not only have amassed huge fortunes, but who also increasingly shape representations of the continent on matters of economic and social policy in the battle for minds in and beyond Africa. As argued in a recent post to this blog series by Nigerian historian Moses Ochonu, engagement with this new crop of entrepreneurs is often fraught with two interrelated problems: ‘One is a failure to develop an analytical toolkit that accommodates the capacious and amorphous entrepreneurial lives of Africans who were pigeonholed into the new neoliberal category of the entrepreneur. The second is a failure to adequately critique the exuberant, self-assured discourse of entrepreneurs as economic messiahs and replacements for the economic responsibilities of the dysfunctional African state.’ I am taking this finding as an invitation to critically think through Africapitalism beyond capitalism.

Originally, ‘Africapitalism’ only provided a shadowy outline of a new economic blueprint for structural change in Africa. Elumelu underlined that ‘its primary goal is greater economic prosperity and social wealth, driven by Africa’s private sector – its domestic economies, markets, and businesses.’  Its agenda, however, became subsequently more philosophically refined as part of an academic project sponsored by Elumelu’s Foundation at the University of Edinburgh School of Business.

The Nigerian academics involved reframed the Africapitalist ethos as a set of fundamental values through which capitalism is supposed to be made to work for Africans. ‘[A] sense of progress and prosperity,’ ‘a sense of parity,’ ‘a sense of peace and harmony’ and a ‘sense of place and belongingness’ were put at the heart of the Africapitalist project.

At first it seems puzzling that someone would unashamedly embrace capitalism as an ideology of the future on a continent that has historically most brutally suffered under it, and which until today – by many accounts – continues to do so. Making a case for capitalism so boldly happens rarely anywhere in the world, especially outside the UK and the US, where Milton Friedman and others have promoted capitalism as a free-enterprise system that brings humans’ true nature to the fore. Friedman even ran a TV show on it.

Originally, ‘Africapitalism’ only provided a shadowy outline of a new economic blueprint for structural change in Africa. Elumelu underlined that ‘its primary goal is greater economic prosperity and social wealth, driven by Africa’s private sector – its domestic economies, markets, and businesses.’

Even in other core capitalist countries such as Germany, politicians or business folk tend to use less controversial vocabulary such as ‘the market economy’ or ‘our economic system’ when they talk about the world they inhabit. When the leader of the Youth Wing of the Social Democrats (JUSOS) in Germany explicitly used the term capitalism in 2019 to argue that what is assumed to be God-given can actually be changed (calling for labour to own stakes in large businesses), all hell broke loose. That the term is avoided in public debate happens even more often across Africa.

Most independence governments shunned capitalism as the ideology of the colonisers, and until today, many leaders shy away from openly embracing it as the ideology of choice. Almost 30 years ago, Paul Zeleza noted that even in countries with a history of pro-capitalist development since independence, such as Kenya, politicians, entrepreneurs and academics rarely made a public case for capitalism. A recent piece by ROAPE’s Jörg Wiegratz for this series on roape.net and a 2019 intervention of the Mathare Social Justice Center seem to reaffirm the discursive invisibility of capitalism in at least that corner of the continent.

The enthusiastic promotion of Africapitalism also seems puzzling given that capitalism has become increasingly questioned as an ideology-cum-economic system that can take us into the future. The global financial crisis, all-time high global inequalities, but also the increasingly obvious ecological limits of an economic system based on infinite growth, present challenges to anyone trying to make a continued case for capitalism.

Critical books diagnosing capitalism as ready to implode, imagining post-capitalist futures or directly attacking those benefiting disproportionally from the machinations of contemporary capitalism have become plentiful, often reminding us that it is either capitalism or the planet.

The enthusiastic promotion of Africapitalism also seems puzzling given that capitalism has become increasingly questioned as an ideology-cum-economic system that can take us into the future

In the wake of the global financial crisis 2007-8, even the promoters of global corporate elites admit that capitalism has come ‘under siege.’ With debates on inequality and climate change at an all-time high, now even some of the biggest profiteers from financialized capitalism, such as investment banker Jamie Dimon, want to save capitalism from capitalism.

The Corona virus crisis is just the latest product of capitalism’s ‘blasted landscapes.’ As Senegalese economist Felwine Sarr recently argued in two widely circulating essays in the German Newspaper Sueddeutsche Zeitung, the COVID-19 pandemic is the product of the minority world’s ‘imperial mode of living’ which partly has been taken up in China and other emerging economies, and now puts the fallout on the rest of us. In a way, it may be considered the harbinger of the climate catastrophe to come – a catastrophe for which only a relatively small part of the world population is responsible (especially if environmental debt is calculated per capita and historically).

The Corona crisis also calls into question the debt-financed growth strategies of many African governments, to the extent that a group of 100 African intellectuals have called for a complete overhaul of the African variant of neoliberal capitalism, where road and airport infrastructures and other ‘urban fantasies’ are prioritized over human well-being.

At the same time, there have been various developments that help us make sense of why ‘Africapitalism’ as an idea emerged and has been taken up so enthusiastically across Africa, and reverberates powerfully even in times of Corona (Elumelu’s UBA just announced a $14 million COVID-19 relief support across Africa).

First, since 2008, Africa has come to be heralded as the last frontier of capitalism, most prominently encapsulated in the ‘Africa rising’ narrative. Although even some intellectuals of capital have been wary of the danger of a single story, such as Mufuruki himself, this narrative has nevertheless redirected the gaze of global capital towards the continent.

As the late Thandika Mkandawire pointed out: ‘Ideas matter. While not always decisive, they do have an autonomous and noticeable effect on interests and institutions.’ Indeed, many African corporate and political elites have tried to exploit this moment of increased global attention, especially the new crop of mega-rich entrepreneurs that Elumelu is part of: the Kirubis, Motsepes and Dangotes of the continent.

Since 2008, Africa has come to be heralded as the last frontier of capitalism, most prominently encapsulated in the ‘Africa rising’ narrative.

Elumelu himself seems to admit that Africa should not rise in a business-as-usual mode. To remedy potential conflicts arising from jobless growth, accumulation by resource extraction and increasing demographic pressures, it ‘is in capital’s own interest to think long-term and invest for social impact’  Why not bet on a mode of production that has, as some would say, proven to be the largest wealth-creating machine in human history?

For Africapitalists, it just depends on the variety of capitalism and how inclusive it is made. It is along these lines that promoters of Africapitalism want to free capitalism from its most excessive and socially destructive features, turning it into a win-win machine for capitalists and the communities they ‘serve’. This is supposed to happen through voluntary, private sector-driven initiatives rather than through taming capitalism through public regulation.

Second, there has been an increasing shift in development thinking over the past decade. The private sector is now being hailed as the prime agent of economic change. The entry of philanthropic entities, private equity funds, impact investors and conventional multinationals into the business of development indicates this trend.

This has been buttressed by a range of concepts that try to give capitalist activities greater legitimacy, such as ‘inclusive capitalism’, ‘corporate citizenship’, ‘social enterprise’, ‘creating shared value’, ‘impact investing’, or the ‘double/triple bottom line approach’.

Africapitalism relates to these intellectual currents, but at the same time claims to supersede them. In such an environment, it sounds increasingly natural to make entrepreneurs – as ‘wealth creators,’ ‘job creators,’ ‘innovators,’ ‘problem-solvers,’ ‘disruptors’ and ‘givers’ the prime movers of economic transformation. Yet those who also create value, be it the state or workers, are largely absent in this narrative.

Third, there are long-standing questions about how to think about Africa’s future development trajectories and through which means ‘development’ could best be achieved. The idea of Africapitalism makes a bold contribution to this debate, reinjecting African agency into the discourse of economic transformation. Many independence leaders were seriously committed to a politics of the future, creating long-term visions of how their societies should develop (e.g., Nkrumah, Senghor, Nyerere) This particular version of politics of the future faded away from the 1980s onwards, when the projects they were based on had run into economic troubles.

‘The African state,’ variously described as socialist, rent-seeking, vampiristic, centralised, clientelist, neopatrimonial, predatory, kleptocratic or failed (Mkandawire 2001: 293), was suddenly blamed for all kinds of evils and the lost development decades of the 1980s and 1990s. Statist and home-grown academic visions of societal transformation were gradually replaced by copy-and-paste adjustment practices. Issa Shivji aptly described this situation a few years ago: ‘The globalization hegemony dictated that the “villages” of the globalizing world did not need thinkers, but only purveyors of thought generated elsewhere.’  Until the early 2000s, African economies had become even greater importers of foreign concepts, something that has always been part of the (post)colonial experience.

The Corona crisis also calls into question the debt-financed growth strategies of many African governments, to the extent that a group of 100 African intellectuals have called for a complete overhaul of the African variant of neoliberal capitalism, where road and airport infrastructures and other ‘urban fantasies’ are prioritized over human well-being.

The longstanding calls for the domestication of ‘development’ moving beyond imperial Western thought, overcoming the colonisation of mind and language, as well as the more recent calls for Africentricity, Africonsciousness and Afromodernity have been responses to this predicament. The idea of Africapitalism fits with the idea that development in Africa should happen with a ‘sense of place’.

It connects with the long-standing desire of African and African Diaspora people to reassert the continent’s role in the world. Frantz Fanon once described this desire powerfully in The Wretched of the Earth, ‘….if we want humanity to take one step forward, if we want to take it to another level than the one where Europe has placed it, then we must innovate, we must be pioneers.’

While closely linked to its Nigerian origin, Africapitalism also ties into and takes inspiration from another vision for Africa’s transformation, Ubuntu economics. Both philosophies are said to ‘embed within themselves the principles of self-determination, African agency, African knowledge and an Africacentric symbolic identity’.

Both philosophies are mobilised to carve out new spaces of thought and practice from the global political economy for accumulating both economic and social wealth in Africa. But Africapitalists have no problem with the foreignness of capitalism, and for the more libertarian kind it is in fact socialist practices that are foreign imports into a context where ‘(p)rofit, trade, and entrepreneurship are inherent aspects of indigenous economic systems’.

For these libertarian Africapitalists, the capitalist ethic is a product of nature (rather than a product of history) – a finding which has been critiqued in an earlier contribution to this blog series by Horman Chitonge. ‘Africapitalism’ also can be related to the long-standing concept of Pan-Africanism, but comes across as a globally more appealing and neutral concept, as Pan-Africanism always had an anti-imperial and anti-capitalist ideological core.

So, what does the concept actually deliver for the continent (and its diaspora people) in terms of transformative, emancipatory and redistributive potential? Despite the welcome Afrocentric and Afroconscious rhetoric, Africapitalists, much like most other politicians and business folk fail to fully ‘open up the present to more than its own repetition.’

This does not deny the need for Africans to advance a more humane, place-based, and connected economy that tries to radically transcend capitalism as the continent has known it. As Mkandawire recently remarked, we should be essentially upbeat about Africa, but it ‘must be given space, or capture space, to think its own way out of its predicament’.

At a time when the true costs of climbing up the capitalist ladder are more obvious than ever; Africa is in a good position to generate real and viable alternative economic futures. But this requires much more than promoting Afrocentric entrepreneurship and needs an approach that enables us to seriously break with the coloniality of power, knowledge and being that has shaped Africa’s adverse insertion into the global political economy since the colonial period. It is only this systemic overhaul which will set African economies on a new footing.

Frantz Fanon once described this desire powerfully in The Wretched of the Earth, ‘….if we want humanity to take one step forward, if we want to take it to another level than the one where Europe has placed it, then we must innovate, we must be pioneers.’

After all, Africanization does not equal decolonization. By relying on categories that were often formed during colonial encounters (such as ‘growth,’ ‘efficiency’; ‘nature serves man as a resource’), by largely subscribing to the current orthodoxy in management and business speak, and by not being grounded in a broader alliance of social forces and ontologies, Africapitalists fail to make visible and utilise the full range of unrealised possibilities that the continent offers when it comes to thinking through capitalism beyond capitalism. They promote a world where redistribution happens because of entrepreneurs’ commitments to the idea of shared value rather than improved tax collection or other forms of redistribution.

Africapitalists also are ‘devoted to the unlikely idea that the bitter conflicts between labour and capital in the West can be replaced on the continent by capitalism informed by the humanistic solidarities of Ubuntu. They imagine a world where capitalist enterprises create economic and social value in the communities they serve through win-win arrangements. It is also a world where large foundations are tasked with economic and social transformation more broadly, despite the increasing evidence of the flaws of the venture philanthropy model/philanthrocapitalism, and the wanting labour, environmental and corporate governance track record of companies that are being cited as good examples of Africapitalism (take Zambeef or Nakumatt, for instance).

In order to revoke the current economic order, we need concerted, pan-African and radical efforts to remake African economies, which are at the same time grounded in the awareness that Africa is part of a wider global ensemble in which humans are one among many species. This does not mean that Africans must scale down on their desire to live dignified, fulfilled, and secure lives, but that anyone engaging with the future must dare to move outside a frame that may hold for only another few decades before it will fully fall apart.

Such questions may be dismissed against the background that Africapitalism is first and foremost about attaining the discursive power to shape one’s own economic destiny in a region where millions of people are yet to enjoy the material wealth of the North, or many emerging economies, and thus lack the privilege to think beyond capitalism. During such an endeavour, questions of environmentalism may be treated rather agnostically.

Yet, even though attaining the power to shape one’s own destiny and developing a set of discursive, place-based concepts that can help build alliances around a project of economic transformation are certainly key to more prosperous African futures, it can be questioned whether this should be done through practices that have historically built wealth in certain regions of the world only on the back of cheap nature, food, labour and energy elsewhere.

The COVID-19 pandemic is nature’s way to fight back, bringing the technologically sophisticated yet often ecologically destructive and dehumanising architecture of contemporary supply chain capitalism to its knees, further proves the ecological and social limits of any variant of capitalism. It is worth re-reading Fanon: ‘So comrades, let us not pay tribute to Europe by creating states, institutions, and societies that draw their inspiration from it. Humanity expects other things from us than this grotesque and generally obscene emulation.’

The article was published in the Review of African Political Economy journal extended version originally published in Africapitalism: Sustainable Business and Development in Africa by Idemudia and Amaeshi (eds) 2019.

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Urban Africa Under Stress: Rethinking Economic Pressure in Cities

As in other neoliberal cities, the remedies for significant economic burdens are individualized and the political economy that scaffolds them often remains hidden from view. Instead, predatory mobile loans, principally targeting youth, are offered at exorbitant interest rates, the booming church industry thrives on a prosperity gospel that promises individual riches in exchange for prayers and the country’s development is projected in a number of ‘vision’ documents that promote large-scale infrastructure rather than an improvement in basic conditions for all Kenyans.

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Urban Africa Under Stress: Rethinking Economic Pressure in Cities
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Research on economic pressure in Africa has been approached from diverse vantage points. While economists frame ‘pressure’ as a consequence of market failures, or as a by-product of macro-economic measures such as structural adjustment reforms or technological and political change, anthropologists who zoom in on the economic pressures individuals face in their everyday lives, i.e. the lived experiences of those who are ‘under pressure’ have focused more on topics such as uncertainty and precarity. Alternatively, economic psychologists tend to naturalise pressure as an individual response to an adverse financial situation, eclipsing the varied ways pressure is intertwined with and shaped by broader societal transformations, power structures, social relations and obligations, and webs of exchange. There are currently no studies we are aware of that focus on the multi-faceted societal constitution of economic pressure in capitalist Africa, or that compare how pressure is experienced across gender, generation or socioeconomic groups.

How do we study pressure?

Our review of existing literature on economic pressure has identified two main gaps. On the one hand, most ethnographic studies focus on a particular group/community (e.g. female gig workers, urban poor, farmers, security guards, an extended family or even a few individuals). How the experiences and drivers of pressure differ across groups according to class, income, gender, geography, profession etc., is largely absent from the literature. On the other hand, studies tend to frame pressure in the context of one specific driver (e.g. agrarian change, consumer credit, financial inclusion, changes in the structure of work, unemployment, supply chain dynamics, etc.), often in a broader context of neoliberalism, commercialisation, and globalisation.

Our blog series aims to address these gaps by exploring economic pressure in a more situational and practice-oriented way, in which pressure is understood as an affect produced in and through specific geographies, temporalities, and social and economic relations. This allows us to apprehend how specific geographies such as neighbourhoods, estates, markets or cities are pressure inducing or “under pressure”. We frame economic pressure as a multi-causal and highly localized phenomenon shaped by broader geographic, social, cultural, economic and political environments, while, at the same time, acknowledging the value of a comparative approach that captures the experience of pressure across social and economic classes.

Correspondingly, our intervention – in this blog series and beyond – aims to critically engage with and counter two main positions in the literature and policy debates. First, we argue that as a social experience, economic pressure and stress are not confined to the urban poor. By widening the categories of actors (e.g. ultra-poor, poor, middle-class, rich and super rich), our analysis and debate expands the portrayal of pressure as an experience that solely affects the poor; whether it be the “hustler” striving to make ends meet on the streets of Nairobi or families using food banks in Johannesburg. Understanding the cross-class characteristics of pressure is key to understanding how it has become an ubiquitous phenomenon constitutive of capitalist society and everyday life.

Second, we question the assumptions regarding the power of individual action and choice prevalent among psychologists, behavioural economists and other social scientists working on the productive potential of hope, aspirations and self-efficacy (e.g. the work of behavioural economists such as Johannes Haushofer as well as anthropologists such as Arjun Appadurai). Instead, we take the position that economic pressure is produced through the intersection of overarching ideologies, economic structures, social webs of exchange, and the dynamics of capitalism that shape the lives of all classes in the urban population. Based on our review of existing literature and preliminary qualitative interviews conducted in Nairobi, we suggest that economic pressure is an emotional state engendered by a cognitive assessment of a real/imagined disbalance between real/imagined economic demands and the real/imagined ability to fulfil them. Crucially, the existence of economic pressure does not necessarily entail an actual disparity between demands and abilities; rather, it is a (inter)subjective experience produced by changes in an actor’s social and material environment that suggests to him or her that such a disbalance exists and is relevant, significant and urgent. Hence, we do not conceptualise economic pressure as a quantitatively measurable individual feeling, but as an affect whose constitution, magnitude and presence are a function of atmospheric changes in one’s environment. Economic pressure is thus better grasped by local idioms such as piny pek (Dholuo, “the world weighs heavy”) or ngori (Sheng, “trouble”) than through a set of objective criteria.

Where do we study pressure?

Our focus is the capitalist and especially neoliberal city. The effects of neoliberal restructuring and regimes of accumulation have been particularly inimical in African cities, which face ever deepening informalisation, inequality, insecurity, economic uncertainty and attendant excessive policing, yet continue to pulsate with the promise of possibilities. African cities are particularly fertile sites in which to examine pressure as they are agglomerations of rapid and often turbulent social, cultural and economic change triggered by late capitalism, and are home to a range of interconnected actors who experience and manage, as well as co-produce and co-intensify, pressure across class and other divides. City dwellers also experience a constellation of conditions that are distinct from their rural counterparts: they have more business opportunities and risks; face a range of infrastructural constraints, from rising housing and transport expenses to a shortage of affordable housing, water and sanitation; experience high levels of poverty, widespread under-/un-employment, and intense competition for jobs with concomitant downward pressure on wages in the context of increasing rural urban migration; are more vulnerable to urban criminals or state agents (police etc.) that rob them of their earnings or assets, and their financial demands are not fixed, but ever-changing, often with an accelerated speed, and abetted by mobile technology, the self-help industry, and loan apps that encourage financial action. In addition, urban residents are more plugged into the circuits of global capitalist culture (technological connections, media, music, wealth, digital work, etc.) and the latter’s imaginaries of prosperity contribute to the trend of restless and calculative agency.

This complex and shifting landscape of ‘pressure in the city’ demands an inter-disciplinary approach to apprehend how economic demands, obligations and constraints interweave with the social worlds and life experiences of city dwellers. This includes, on the one hand, examining the inter-relationship between available income (and saleable assets more widely) and the necessary and desired demands that actors (and their families, kin, and social networks) face. This income-demands gap (as distinguished from the income-expenditure gap) is a key catalyst of ‘pressure’. On the other hand, this requires tracking pressure across noneconomic registers – financial, cultural, social, psychological – and gaining a comprehensive picture of how these registers relate. For example, while pressure is associated with a number of common somatic symptoms such as sleeplessness, ulcers, lack of energy, depression, over-activity and burn-out, it may also create the conditions that prompt an array of actions such as gender-based violence, concealing or switching phones to avoid being observed or contacted, gambling and drinking, which can induce new psychological, financial and social pressures. Attaining a full picture of pressure — its drivers, symptoms and consequences — thus necessitates an inter-disciplinary and multi-methodological approach.

“One illness away from poverty”: Economic pressures and uncertainty in Nairobi

In the context of the pandemic, Nairobi continues to be a city of disparities. Against the looming local and global slow-down that the Covid-19 crisis has provoked, a recent poll shows that vast sections of the Kenyan population are now unable to pay for utilities (67%), rent, or medicine, can no longer remit money to dependants (79%), have defaulted on loans repayment (75%), and had to turn to food donations. Significantly, 81% of those surveyed are anxious and stressed, while 52% felt helpless and 33% angry. Indeed, the conditions urban residents face are stressful. With the large tracts of the promised Covid-19 stimulus package monies unaccounted for and seemingly never expended, the inconsistent food donations in poor communities tapering, and one million jobs lost in three months, daily life is now even more difficult to plan. But these pressures build on dynamics that existed before the pandemic. In February 2020, before the government implemented a lockdown, census data documented that 39% of youth (between the ages of 18-35) were unemployed. Likewise, over half of those employed in 2018 earned less than 10,000 Kenya shillings a month [less than $100], which is barely enough to cover basic necessities such as food, transport, housing and clothing. With privatization and the high cost of basic services such as rent, healthcare, water and, in many poor neighbourhoods, even sanitation facilities, meeting one’s every day needs is a significant financial strain. Even the middle-class are only “one illness away from poverty” due to the inordinate cost of private health care and similar shocks.

As in other neoliberal cities, the remedies for these significant economic burdens are individualized and the political economy that scaffolds them often remains off-staged/hidden from view. Instead, predatory mobile loans, principally targeting youth, the poorest and underemployed, are offered at exorbitant interest rates, the booming church industry thrives on a prosperity gospel that promises individual riches in exchange for prayers (and often significant tithes) and the country’s development is projected in a number of ‘vision’ documents that promote large-scale infrastructure (such as roads, railways, airports etc) rather than an improvement in basic conditions for all Kenyans.

It is against these realities, that, over the last few years, public discourse more and more features words such as “mental health” and “burnout.” It is not a coincidence that this vernacular is taken up at a time when most Kenyans, surveyed across geographies, genders and classes, reported that their financial status worsened between 2016 and 2019.Interestingly, during this same three year period, we observe increasing (neoliberal) efforts directed towards “financial inclusion” habitually channelled through “fintech.”

Certainly, Kenyans are finding it hard to juggle all their economic burdens, from extended families to basic necessities, let alone finance the personal and collective aspirations for home ownership, better education, cars etc. All around, across all demographics, there is personal and collective work directed towards lightening these loads, made by piny pek – a heavy world. There are bets hedged, some won and many lost; collective savings groups, gambling, debts, and other situated modes to narrativize and negotiate economic pressures. Future blog posts will detail these means of coping in more ethnographic depth, showcasing the fervent efforts people of all walks of life in Nairobi, a capitalist city, are making to ease the pressure.

This article was first published in the Developing Economics.

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Lights in the Ocean: Seeing Potential in Kenya’s Blue Economy

A number of factors have conspired to hinder the growth of Kenya’s maritime industry. Chief among these factors are lack of sufficient support from the government, policy gaps, high shipping costs, and lack of specialised maritime training.

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Lights in the Ocean: Seeing Potential in Kenya’s Blue Economy
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In 2015, when the Kenya Maritime Authority (KMA), the industry regulator, took the National Maritime Conference to Nairobi for the first time, policy makers at the highest level became aware of what a sleeping giant the industry was. Underscoring how much the blue economy (BE) had become a priority for Kenya, the government hosted the first-ever global Sustainable Blue Economy conference in November 2018, with support from Japan and Canada. About 16,000 delegates drawn from all over the world participated.

Key political messages that came from Kenya included the need to mobilise financing for the industry; creation of a blue economy and people-centered strategies on sustainable development; streamlining gender equality in the industry; and strengthening science and research, among other measures to awaken the giant.

Participants made voluntary financial commitments amounting to $172.2 million in various aspects of the BE, as well as several non-monetary commitments in areas like partnerships and capacity-building.

On numerous occasions since 2015, President Uhuru Kenyatta has indicated that Kenya is prioritising the implementation of sustainable blue economy programmes since the sector has the potential to accelerate the country’s development. He has cited the shrinking of land-based resources as a result of a rapidly rising population in Kenya as a good enough reason for a prudent government to lay more focus on resources spread in the ocean with an area of 245,000 km², or 42 per cent of her total land area, which makes Kenya a maritime state.

However, various measures that the government has undertaken in recent years to accelerate the BE have not yielded the envisaged results. This is largely blamed on many years of policy neglect and a consistent failure by the industry’s players to take remedial actions.

Policy gaps

From the onset, Kenya has not been keen on the growth of the maritime sector. Even Kenya’s first independence economic blueprint, African Socialism and its Application to Planning in Kenya of 1965, failed to anchor BE in the country’s economic growth agenda, in spite of its significant role in transporting 95 per cent of the country’s global transactions.

The industry has thus evolved without the support of state policy-making machinery. Instead, it has largely relied on foreign players, who continue to exploit it to date and who repatriate billions from the economy.

Merchant Shipping Act 2009, which was assented to by Kenya’s President Mwai Kibaki after two lapses in Parliament due parliamentarians’ ignorance of its urgency, was the first attempt to regulate the sector. The new law was the brain child of KMA, which was established in 2004 to oversee the transfer of responsibilities in shipping matters from the Kenya Ports Authority (KPA) to an autonomous state corporation. This push came from the US government, which was afraid that having succeeded to hijack planes and carry out the September 11, 2001 terror attacks, terrorists could also do the same on largely unsecured African ports.

The industry has thus evolved without the support of state policy-making machinery. Instead, it has largely relied on foreign players, who continue to exploit it to date and who repatriate billions from the economy.

The 2009 Act created a comprehensive and modern legal regime for merchant shipping in Kenya and replaced the outdated Merchant Shipping Act, 1967. The old law did not reflect major transformations in the industry globally, which prevented the full exploitation of Kenya’s maritime industry.

The president’s good intentions on the industry are clear. However, there is a clear policy gap on who should steer the growth of BE. The president, in January 2017, appointed the Chief of Defence Forces, Samson Mwathethe, to chair a Blue Economy implementation Committee. The Kenya Gazette notice said that the eight-member team was mandated with co-coordinating and overseeing the implementation of the prioritised programmes in the industry and was to submit monthly reports.

Most importantly, it was supposed to develop an Integrated Maritime Transport Policy to galvanise and harmonise an industry that is currently overseen by 22 agencies with duplicating and conflicting roles. For over 3 years now, this has not yet been achieved and signs that the committee is working on it are nowhere to be seen.

The management of the BE is currently spread through three government departments without any clear mechanisms of collaboration despite the great interdependence among the players in the maritime industry.  Executive order no. 1 of May 2020 places KPA and the Kenya Ferry Services (KFS) under the transport department. The Department of Shipping and Maritime Affairs oversees KMA, Bandari College and Kenya National Shipping Line, while the state department for fisheries is in charge of the Kenya Marine and Fisheries Research Institute and the Kenya Fisheries Advisory Council.

Without a harmonised approach, the country has failed to exploit sea-based resources, which are worth a huge fortune. In 2018, the then Agriculture Cabinet Secretary, Mwangi Kiunjuri, said Kenya was losing over Sh440 billion annually by failing to fully exploit the blue economy.

Marine fishing’s lost potential

The Western Indian Ocean has resources worth more than Sh2.2 trillion annual output, with Kenya’s share being about 20 per cent of this. The marine fishing sub-sector alone had an annual fish potential of 350,000 metric tonnes in 2013 worth Sh90 billion. However, the region only yielded a paltry 9,134 metric tonnes worth Sh2.3 billion.

Optimal exploitation marine fishing is hindered by infrastructural limitations and inappropriate fishing craft and gear. Artisanal fishers mainly restrict their operations to the continental shelf because they are ill-equipped in terms of craft and equipment to fish in the deep sea.

The Kenyan coastline is rich in fish species. For instance, Malindi is the only place in the world that offers the best chance of catching five different billfish species in one day – broadbill swordfish, black, blue and striped marlin and sailfish.

In 2018, the then Agriculture Cabinet Secretary, Mwangi Kiunjuri, said Kenya was losing over Sh440 billion annually by failing to fully exploit the blue economy.

The deep sea waters are left to Distant Water Fishing Nations (DWFN) who mainly fish tuna species. Kenya lies within the rich tuna belt of the West Indian Ocean where 25 per cent of the world’s tuna is caught.

Foreign fishing fleets can operate in Kenya’s Exclusive Economic Zone (EEZ) in accordance with the regional and international agreement and cooperation provision of the National Oceans and Fisheries Policy, which allows governments to continue granting fishing rights in their EEZs, taking into account the state of the stock and economic returns.

In December 2017, President Kenyatta suspended the licences of foreign trawlers as part of efforts to grow the country’s blue economy through value addition. During the 54th commemoration of the country’s independence, he said that the ban on foreign vessels would help increase fish processed locally seven-fold to 18,000 tonnes per year. Kenya, the president announced, loses about 10 billion shillings ($97 million) a year to foreign boats fishing without permission.

Lack of specialised maritime training

Although Kenya requires fishing vessels to land 30 per cent of their catch in the country to create processing jobs, coastguards lack sufficient capacity to police the country’s territorial waters.

Andrew Mwangura, a maritime expert in Mombasa, argues that carving out coastguards from the military was a big mistake. Coastguards have more roles to play and need specialised training. With only one boat at their disposal and less than 40 officers, he opined, coastguards lack capacity to effectively deal with the issue of illegal fishing. Coastguards are supposed to offer maritime safety and security with on-board other officers from customs, fisheries, port health, immigration and police.

Kenya’s effort to venture into deep sea fishing is not only limited due to lack of physical infrastructure but the country’s ill-trained workforce as well. The International Convention on Standards of Training, Certification and Watchkeeping for Fishing Vessel Personnel, 1995 (STCW-F 1995), entered into force on 29 September 2012, sets certification and minimum training requirements for crews of seagoing fishing vessels of 24 metres in length and above.

For maritime training institutes worldwide, the International Maritime Organisation (IMO) has developed a series of model courses that provide suggested syllabi, course timetables and learning objectives to assist the instructors to develop training programmes to meet the STCW Convention standards for seafarers.

Out of more than 30 courses offered in maritime training, as recommended by IMO, Bandari (which has since last year been renamed Bandari Centre of Excellence) is only able to offer 6 of these courses.

In addition, Bandari lacks shipboard training opportunities due to the nascent development of seafarer training in Kenya, which has caused delays in completion of training courses, given that shipboard training is compulsory in order to be certified. An integral part of the programmes for Sea Training is to ensure that the students acquire practical knowledge through actual work experience. One has to learn by doing while at sea and in port.

Out of more than 30 courses offered in maritime training, as recommended by IMO, Bandari (which has since last year been renamed Bandari Centre of Excellence) is only able to offer 6 of these courses.

Lack of training of seafarers will also lock Kenyans from the off-shore gas and oil industry exploration taking place in our high seas.

To optimise the gains in the sector, there is a serious need to invest in human resources by rolling out training in higher education institutions and tertiary colleges.

Despite the growing demand to create enough workforce commensurate with the industry’s growth, the status of maritime training is not very encouraging. Only three colleges and two universities offer maritime courses in the country, with most of the other professionals having trained overseas at highly prohibitive costs.

By 2016, the Philippines had over 37 maritime academies, 20 maritime training centres and 17 crewing manning agencies, enabling it to supply 20 per cent of the world seafarers.

High shipping costs and lack of a competitive environment

In its endeavour to facilitate and promote global maritime trade, the Blue Economy Implementation Committee identified the revival of the Kenya National Shipping Line (KNSL) as a critical intervention, with a potential of contributing to the exchequer Sh304 billion annually.

To do this, KNSL partnered with the Mediterranean Shipping Company (MSC) of Italy, in what was described as a government-to-government arrangement that would see the government retain the majority shareholding (51 per cent) at KNSL to turn it into a major national carrier.  Merchant Shipping Act section 16 A was amended and assented to allow the deal. However, the Dock Workers Union (DWU) challenged this in a court of law and when the ruling was done in its favour, the government deal collapsed.

The government’s plan intended to support the revival of the KNSL, which has been dormant for the last 23 years. Mismanagement sent the entity, which was established in 1987, into debt and loss of business. The deal was supposed to allow the MSC to run the second container terminal (CT2) at the port of Mombasa and it would also hire 2,000 seafarers every year for the next five years in return.

The estimated transport charges paid out to shipping lines calling at Mombasa port is about Sh304 billion annually. There is also another list of destination charges applied in the country that have made the shipping business in Mombasa costly.

The government, in supporting the deal, estimated that its cargo costs an average of Sh14billion in freight per year, while local destination charges comprise another Sh34 billion. With local shipping capacity and the application of “Buy Kenya, Build Kenya” policies, the amount of Sh14 billion could be retained in Kenya, Transport CS Mr. James Macharia argued in support of the deal.

In the absence of a pricing framework or competitive environment, the destination tariff has proliferated in Mombasa port to 36 charge items. The revived KNSL could be used by the government to influence and leverage the reduction or doing away with components of destination charges thus reducing the national burden in maritime transport. Some of the charges include delivery order fee, amendment to bill of lading fee, supervision fee, manifest correction fee, currency exchange rate, container repair charges, and equipment management fee, among others.

In running the liner service, KNSL had the option of chartering or acquiring with time its own vessels. It was anticipated that income arising from transferring MSC trans-shipment cargo from Mombasa to other ports around Africa would yield sufficient funds to make consideration of vessel acquisition a reality in the long run.

The second container terminal is currently being operated by Maersk Shipping, the largest line calling at Mombasa, with control of over 30 per cent of the total cargo volumes at the port. When the terminal was finished over three years ago, it was supposed to be operated by a private player, who KPA was unable to pick from bidders due to a row that ended up in court.

Last year, Denmark, France, Japan and the UK protested that management of CT2 should have gone out to international tender since this was a condition for Japan to provide Sh28 billion for the first phase and Sh35 billion for the second phase construction.

Marine Cargo Insurance (MCI) also has huge potential. Its overall performance has significantly improved since the National Treasury directive to enforce Section 20 of the Insurance Act came into effect on 1 January 2017 that requires compulsory purchase of MCI from local underwriters. However, by importing cargo on Cost Insurance Freight (CIF) and the lack of proper coordination between various agencies has made the enforcing of this requirement a huge challenge.

Claims of undercutting have rocked the MCI insurance business as a record number of players entered the segment. The Insurance Regulatory Authority (IRA) had in the past raised concerns over unsustainable premiums.

Following the directive, the MCI performed considerably well compared to the years before 2017. The gross written premiums were Sh2.3 billion compared to Sh1.45 billion in 2016, representing an increase of 59 per cent. Based on the value of the imports, MCI premiums can generate up to Sh20 billion for local underwriters if the law is fully enforced.

Twenty-seven insurance companies have been brought on the online cargo clearing system run by the KenTrade, which is being integrated with the Kenya Revenue Authority’s Integrated Custom Management System (iCMS). This could help in enforcing section 20.

Cruise ship tourism: The next frontier

Cruise ship tourism is another area with huge potential as it targets high- end tourists. Industry experts say that 400 cruise tourists are equivalent to 4,000 tourists who come to the country via air. Kenya Ships Agents Association (KSAA) estimates that 40 cruise ships calling at the port could translate to US$20 million.

In 2004, at least 42 cruise ships arrived in Mombasa, with 15,166 passengers who took safaris to various destinations, especially to Maasai Mara and Tsavo national parks, earning the sector millions of shillings. But the number dropped as piracy took over in the Indian Ocean, with 2012 being the worst since not a single vessel called at Mombasa port.

Industry experts say that 400 cruise tourists are equivalent to 4,000 tourists who come to the country via air. Kenya Ships Agents Association (KSAA) estimates that 40 cruise ships calling at the port could translate to US$20 million.

A memorandum of understanding was signed early this year between Kenya and Vanilla Islands, a consortium of island nations including Seychelles, Madagascar, Mauritius, Comoros, Reunion, Mayotte and the Maldives.

Construction of the Mombasa cruise ship terminal at the port of Mombasa, which was supported by the Trademark East Africa. has been completed. The new terminal contains duty free shops, conference facilities, restaurants, offices, baggage conveyor belts, and migration and health offices. Further, the facility has a capacity to handle 2,000 cruise ship passengers at a time.

Stakeholders in the hospitality industry have been pushing to be represented at the KPA board so that they can help in understanding cruise tourism dynamics, such as developing cruise facilities at the other smaller ports, and in influencing the port to bid for as many cruise vessels as possible.

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