Connect with us

Op-Eds

Highway Robbery and Sex Toys: Plunder by the Numbers

7 min read.

Did the Jubilee government loot $20 billion during its first term? The equivalent of 10 Eurobond issuances, the money has disappeared from the government’s loan portfolio. Technically broke by its own admission, Treasury has blamed, unconvincingly, everything from devolution to the wage bill for the state of its finances. DAVID NDII delivers another damning indictment against the pirates of pillage.

Published

on

Highway Robbery and Sex Toys: Plunder by the Numbers
Download PDFPrint Article

Three weeks ago, Finance Cabinet Secretary Henry Rotich caused a stir when he reportedly declared the government broke. Rotich made the pronouncement in Parliament, when he gave notice that he would be presenting an austerity supplementary budget to plug a Ksh. 84 billion hole in the government’s finances. A day later, he retracted— with good reason. When Simeon Nyachae did so 20 years ago, he was promptly demoted to the Ministry of Industry. He declined the job and left government.

The pronouncement came hot on the heels of Mr. Rotich’s gallant return from the City of London waving a fistful of dollars, two billion of them, which he proclaimed a ringing endorsement of Jubilee’s economic stewardship, an emphatic vote of confidence in our economy by the global financial markets.

Three weeks ago, Finance Cabinet Secretary Henry Rotich caused a stir when he reportedly declared the government broke. Rotich made the pronouncement in Parliament, when he gave notice that he would be presenting an austerity supplementary budget to plug a Ksh. 84 billion hole in the government’s finances. A day later, he retracted— with good reason. When Simeon Nyachae did so 20 years ago, he was promptly demoted to the Ministry of Industry. He declined the job and left government.

Two questions arise. First, if you’ve just raised 10 percent of your budget in one fell swoop, you ought to be flush with cash. Second, economic growth as brisk as projected should swell the public coffers. And growth prospects ought to be strong. We know the Jubilee government has borrowed upwards of two trillion shillings in its first term, doubling our public debt in the process. This is a huge amount of money— about three times the GDP of Rwanda. The economic benefits of the SGR and the other infrastructure projects that this money has financed should be kicking in now. Jubilee’s economic math does not add up. Where has the money gone?

Let us start with where it has not gone.

It is not the wage bill. As this column has demonstrated on several occasions, all the wage bill hysteria is fake news. The wage bill has only increased 23 percent, well below the rate of revenue growth. In effect, wage outlays share of revenue has been falling. It is difficult to understand why government lies about the wage bill. It is even more difficult to understand how it expects to get away with it when its own reports tell the complete opposite such as demonstrated by the chart below, which appears in this year’s Budget Policy Statement.

Wages as a percentage of National Government Revenue

It is not devolution either. Contrary to popular opinion, the establishment of counties did not entail expansion of government, or any new outlays. In fact, the number of elected representatives was reduced from more than 3,000 councillors to 1,450 county assembly members (MCAs). The money going to counties followed the functions. It should have been offset by reductions in national government budget on the same. In effect, devolution should be budget neutral.

The actual budget for (electricity) transmission and distribution is Ksh. 277 billion… Between half and two-thirds of the Ksh. 277 billion budget has been eaten.

In their first year of existence, the county governments’ revenue share came to Ksh. 193 billion but the deficit increased by only Ksh.66 billion. In the subsequent four years, county transfers have increased by 12 percent per year on average, while national government expenditure excluding county transfers has increased 16 percent per year, in other words, national government is gobbling money faster than the counties.

The wage bill and devolution are scapegoats.

In its four full financial years the Jubilee administration has posted capital budget to the tune of Ksh. 2.5 trillion. This is almost double the cumulative transfers to the counties over the same period (Ksh.1.3 trillion). Counties are mandated to invest a minimum of 30 percent on development but few manage to do so consistently. Cumulatively, capital spending in the counties is in the order of Ksh. 300 billion. Excluding the railway, the Jubilee administration has invested on average Ksh. 45 billion per county, while the county governments’ have spent an average of Ksh.6 billion. This means that on the ground, we should be seeing seven times as many, or bigger, national government development projects as county government ones. Where are they?

Between roads and power is a combined Ksh. 760 billion shillings which is still only a third of the Ksh. 2.1 trillion we need to account for. Where is the rest of it?

Roads are the obvious place to start. The Jubilee administration promised the mother of all road building programs. In 2013, they took over 1788 km of road under construction (new and major rehabilitations) from the grand coalition government, with a contract value of Ksh. 143 billion. By the end of 2016, the most recent published data available shows they had increased this tally to 1931 km with contract sum of Ksh. 221 billion. The data shows that 932 km of these roads worth Ksh. 95.8 billion were inherited, meaning that Jubilee had commissioned 1000 km of new roads for Ksh.126 billion. This is not earth shattering. In fact, of these only 315 km are new roads, the rest being rehabilitation and upgrading of existing roads.

But construction costs have gone up 44 percent, from Ksh. 80 million to Ksh. 115 million per kilometre. In 2014, crude oil prices plummeted from US$ 110 per barrel to an average of US$50 for the rest of the period. The cost of bitumen mirrors crude oil prices, and road construction also consumes copious amounts of diesel. Road construction costs ought to have fallen by at least 25 percent, which translates to Ksh. 55 million a kilometre. We are being fleeced at least Ksh. 55 million a kilometre of road build by Jubilee than we were being fleeced before.

The other big ticket infrastructure item is electricity, and one of the administration’s flagship ventures. Budget data shows a cumulative outlay of Ksh. 360 billion over the four years. These figures are questionable.

The electricity transmission operator Ketraco reports that it has completed 1800 km of transmission lines since it was set up in 2007. It has another 2400 km under construction. The construction cost of transmission lines are not published, but we can work around this. One of these lines, the Loiyangalani-Suswa transmission line has been in the news a lot for all the wrong reasons. The line is for evacuating power from the Turkana Wind Power project (which is actually in Marsabit county). The power project was completed in 2017, but the government failed to complete the transmission line in time meaning that we have to pay the investor over a billion shillings a month for power we are not consuming. This is part of the reason why electricity costs have spiked, but I digress.

I recently estimated the Uhuruto kleptocracy’s plunder at Ksh. 350 billion (US$3.5 billion) which ranked it fifth in the world kleptocracy league table, right behind Mobutu and Abacha in joint third (US$5 billion), Ferdinard Marcos in second (US$10 billion) all trailing Suharto at US$35 billion). It is beginning to look like a gross understatement.

The cost of the 428 km 400Kv transmission line is quoted as Euro 142 million (Ksh. 17.8 billion), which works out to Ksh 42 million a kilometre. The actual budget for transmission and distribution is Ksh. 277 billion. At Ksh 42 million a kilometre, this budget outlay is the equivalent of 6,600 kilometres of 400Kv transmission lines, 60 percent more than all the transmission lines built and under construction over the past decade. And most of the lines are not 400Kv lines. They are 220Kv and 132Kv, which cost considerably less. The reasonable cost of the 2800 kilometres of transmission lines under construction would be in the order of Ksh.100 billion. Between half and two-thirds of the Ksh. 277 billion budget has been eaten.

Policy and planning, and public financial management, whose only infrastructure is IFMIS, do not immediately strike one as capital-intensive undertakings. Investment in policy and planning has absorbed Ksh. 140 billion, an average of Ksh. 35 billion a year. Investment in public financial management has absorbed Ksh. 137 billion. Two functions that require no brick and mortar have consumed Ksh. 277 billion. SGR from Mombasa all the way to Konza? Computers and sex toys? There is something rotten in the state of Denmark.

The budget figures for roads are equally questionable. While, as we have already established, the actual road output is in the order of 1,800 kilometres costing Ksh. 220 billion, the budget documents reflect a capital outlay of Ksh. 400 billion. Last financial year alone, the budget was Ksh. 147 billion. At the Jubilee cost of Ksh.115 million per kilometre, this outlay works out to 3500 kilometres of road – 1,500 kilometres more than the projects underway at the end of 2006 as per latest published data. Could the Jubilee administration have commissioned 1500 kilometres of road in 2017? We are talking Mombasa-Nairobi three times, Lunga Lunga to Lokichoggio with 100 kilometres to spare. Admittedly, we did see Uhuru Kenyatta racing up and down the country commissioning things, but 1,500 kilometres is a stretch.

We are done with the big infrastructure things. Between roads and power is a combined Ksh. 760 billion shillings which is still only a third of the Ksh. 2.1 trillion we need to account for. Where is the rest of it?

Policy and planning, and public financial management, whose only infrastructure is IFMIS, do not immediately strike one as capital-intensive undertakings. Investment in policy and planning has absorbed Ksh140 billion, an average of Ksh. 35 billion a year. Investment in public financial management has absorbed 137 billion. Two functions that require no brick and mortar have consumed Ksh. 277 billion. SGR from Mombasa all the way to Konza? Computers and sex toys? There is something rotten in the state of Denmark.

As this column has demonstrated on several occasions, all the wage bill hysteria is fake news

Water and irrigation was funded to the tune of Ksh. 160 billion, but pray, why are we still ravaged by drought. Last year, we spent Ksh. 244 billion to import food, more than double the preceding five-year average of Ksh. 112 billion, and this year promises to be another bumper food import year. Thwake, the biggest dam ever comes with a price tag Ksh. 36 billion. It is not in these figures, but we’ve already been doing the equivalent of one every year. Youth and women have been empowered to the tune of Ksh. 60 billion. Youth and women enterprises should be thriving everywhere. And on and on it goes.

The puzzle of Jubilee’s economic math is no puzzle at all. Borrowed money has been plundered and squandered. It should not surprise. Kenya National Assurance, Kenya Meat Commission, KCB, National Bank, Kenya Airways, Uchumi, KCC, Mumias and countless others we have plundered state corporations, some several times over. It was only a matter of time before we plundered the Government itself.

I recently estimated the Uhuruto kleptocracy’s plunder at Ksh. 350 billion (US$3.5 billion) which ranked it fifth in the world kleptocracy league table, right behind Mobutu and Abacha in joint third (US$5 billion), Ferdinard Marcos in second (US$10 billion) all trailing Suharto at US$35 billion. It is beginning to look like a gross understatement.

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.

David Ndii
By

David Ndii is a leading Kenyan economist and public intellectual.

Op-Eds

Haiti: The Struggle for Democracy, Justice, Reparations and the Black Soul

Only the Haitian people can decide their own future. The dictatorship imposed by former president Jovenel Moïse and its imperialist enablers need to go – and make space for a people’s transition government.

Published

on

Haiti: The Struggle for Democracy, Justice, Reparations and the Black Soul
Download PDFPrint Article

Haiti is once again going through a profound crisis. Central to this is the struggle against the dictatorship imposed by former president Jovenel Moïse. Since last year Mr. Moise, after decreeing the dismissal of Parliament, has been ruling through decrees, permanently violating Haiti’s constitution. He has refused to leave power after his mandate ended on February 7, 2021, claiming that it ends on February 7 of next year, without any legal basis.

This disregard of the constitution is taking place despite multiple statements by the country’s main judicial bodies, such as the CSPJ (Superior Council of Judicial Power) and the Association of Haitian Lawyers. Numerous religious groups and numerous institutions that are representative of society have also spoken. At this time, there is a strike by the judiciary, which leaves the country without any public body of political power.

At the same time, this institutional crisis is framed in the insecurity that affects practically all sectors of Haitian society. An insecurity expressed through savage repressions of popular mobilizations by the PNH (Haitian National Police), which at the service of the executive power. They have attacked journalists and committed various massacres in poor neighborhoods. Throughout the country, there have been assassinations and arbitrary arrests of opponents.

Most recently, a judge of the High Court was detained under the pretext of promoting an alleged plot against the security of the State and to assassinate the president leading to the illegal and arbitrary revocation of three judges of this Court. This last period has also seen the creation of hundreds of armed groups that spread terror over the entire country and that respond to power, transforming kidnapping into a fairly prosperous industry for these criminals.

The 13 years of military occupation by United Nations troops through MINUSTAH and the operations of prolongation of guardianship through MINUJUSTH and BINUH have aggravated the Haitian crisis. They supported retrograde and undemocratic sectors who, along with gangsters, committed serious crimes against the Haitian people and their fundamental rights.

For this, the people of Haiti deserve a process of justice and reparations. They have paid dearly for the intervention of MINUSTAH: 30 THOUSAND DEAD from cholera transmitted by the soldiers, thousands of women raped, who now raise orphaned children. Nothing has changed in 13 years, more social inequality, poverty, more difficulties for the people. The absence of democracy stays the same.

The poor’s living conditions have worsened dramatically as a result of more than 30 years of neoliberal policies imposed by the International Financial Institutions (IFIs), a severe exchange rate crisis, the freezing of the minimum wage, and inflation above 20% during the last three years.

It should be emphasized that, despite this dramatic situation, the Haitian people remain firm and are constantly mobilizing to prevent the consolidation of a dictatorship by demanding the immediate leave of office by former President Jovenel Moïse.

Taking into account the importance of this struggle and that this dictatorial regime still has the support of imperialist governments such as the United States of America, Canada, France, and international organizations such as the UN, the OAS, and the EU, the IPA calls its members to contribute their full and active solidarity to the struggle of the Haitian people, and to sign this Petition that demands the end of the dictatorship as well as respect for the sovereignty and self-determination of the Haitian people, the establishment of a transition government led by Haitians to launch a process of authentic national reconstruction.

In addition to expressing our solidarity with the Haitian people’s resistance, we call for our organisations to demonstrate in front of the embassies of the imperialist countries and before the United Nations. Only the Haitian people can decide their future. Down with Moise and yes to a people’s transition government, until a constituent is democratically elected.

Continue Reading

Op-Eds

Deconstructing the Whiteness of Christ

While many African Christians can only imagine a white Jesus, others have actively promoted a vision of a brown or black Jesus, both in art and in ideology.

Published

on

Deconstructing the Whiteness of Christ
Download PDFPrint Article

When images of a white preacher and actor going around Kenya playing Jesus turned up on social media in July 2019, people were rightly stunned by the white supremacist undertone of the images. They suggested that Africans were prone to seeing Jesus as white, promoting the white saviour narrative in the process. While it is true that the idea of a white Jesus has been prevalent in African Christianity even without a white actor, and many African Christians and churches still entertain images of Jesus as white because of the missionary legacy, many others have actively promoted a vision of Jesus as brown or black both in art an in ideology.

Images of a brown or black Jesus is as old as Christianity in Africa, especially finding a prominent place in Ethiopian Orthodox Church, which has been in existence for over sixteen hundred years. Eyob Derillo, a librarian at the British Library, recently brought up a steady diet of these images on Twitter. The image of Jesus as black has also been popularised through the artistic project known as Vie de Jesus Mafa (Life of Jesus Mafa) that was conducted in Cameroon.

The most radical expression of Jesus as a black person was however put forth by a young Kongolese woman called Kimpa Vita, who lived in the late seventeenth and early eighteenth century. Through the missionary work of the Portuguese, Kimpa Vita, who was a nganga or medicine woman, became a Christian. She taught that Jesus and his apostles were black and were in fact born in São Salvador, which was the capital of the Kongo at the time. Not only was Jesus transposed from Palestine to São Salvador, Jerusalem, which is a holy site for Christians, was also transposed to São Salvador, so that São Salvador became a holy site. Kimpa Vita was accused of preaching heresy by Portuguese missionaries and burnt at the stake in 1706.

It was not until the 20th century that another movement similar to Vita’s emerged in the Kongo. This younger movement was led by Simon Kimbangu, a preacher who went about healing and raising the dead, portraying himself as an emissary of Jesus. His followers sometimes see him as the Holy Spirit who was to come after Jesus, as prophesied in John 14:16. Just as Kimpa Vita saw São Salvador as the new Jerusalem, Kimbangu’s village of Nkamba became, and still is known as, the new Jerusalem. His followers still flock there for pilgrimage. Kimbangu was accused of threatening Belgian colonial rule and thrown in jail, where he died. Some have complained that Kimbangu seems to have eclipsed Jesus in the imagination of his followers for he is said to have been resurrected from the dead, like Jesus.

Kimbangu’s status among his followers is however similar to that of some of the leaders of what has been described as African Independent Churches or African Initiated Churches (AICs). These churches include the Zionist churches of Southern Africa, among which is the amaNazaretha of Isaiah Shembe. Shembe’s followers see him as a divine figure, similar to Jesus, and rather than going to Jerusalem for pilgrimage, his followers go to the holy city of Ekuphakameni in South Africa. The Cameroonian theologian, Fabien Eboussi Boulaga, in his Christianity Without Fetish, see leaders like Kimbangu and Shembe as doing for their people in our own time what Jesus did for his people in their own time—providing means of healing and deliverance in contexts of grinding oppression. Thus, rather than replacing Jesus, as they are often accused of doing, they are making Jesus relevant to their people. For many Christians in Africa, therefore, Jesus is already brown or black. Other Christians still need to catch up with this development if we are to avoid painful spectacles like the one that took place Kenya.

This post is from a partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

Continue Reading

Op-Eds

In Magufuli’s Shadow: The Stark Choices Facing Tanzania’s New President

One immediate concern is what steps Hassan will take on the pandemic, and whether she will change direction.

Published

on

In Magufuli’s Shadow: The Stark Choices Facing Tanzania’s New President
Photo: Flickr/Gospel Kitaa
Download PDFPrint Article

The sudden death of Tanzania’s President John Pombe Magufuli has thrown the East African nation into a period of political uncertainty.

Vice-president, Samia Suluhu Hassan, has been sworn in as his successor, making her Tanzania’s first woman president.

The transition is all the more challenging given the major rupture – both political and economic – caused by Magufuli’s presidency. Magufuli, who won a second term in October 2020, dramatically centralised power and pursued an interventionist economic policy agenda. He courted controversy on a number of fronts, most recently, by claiming that Tanzania – contrary to mounting evidence – was Covid-free.

Hassan has called for unity and counselled that now is not the time to look at what has passed but rather to look at what is to come.

Despite the 61-year-old leader’s forward-looking stance, questions remain about how Magufuli’s legacy will shape her time in office.

The authoritarian turn

Magufuli oversaw the marginalisation of opposition parties and a decline in civil liberties. His first term was defined by heightened intimidation and violence against opposition leaders, including disappearances and physical attacks.

Thanks to five years of repression, the October 2020 general elections saw the opposition all but wiped out of elected office. The ruling Chama Cha Mapinduzi now controls all local government councils. It also holds 97% of directly elected legislative seats, up from 73% in 2015.

In addition, media freedom and civil liberties were also restricted. A law passed in 2018 imposed jail terms for questioning the accuracy of official statistics.

But Magufuli’s authoritarian tendencies were not unprecedented in Tanzania. For instance, the rule of his predecessor Jakaya Kikwete was also marred by human rights abuses as well civil society and media repression. Kikwete also cancelled Zanzibar’s 2015 election due to a likely opposition victory.

It remains to be seen whether Hassan will adopt a more liberal approach, loosening restrictions on opposition parties, the media and civil society. Even if she does, the damage will take time to repair. Opposition parties, for instance, may well struggle to regain their strength. Among other setbacks, they have lost almost all local elected representatives – a core element of their organisational infrastructure built up painstakingly over decades.

Centralising power in the party

Another key pillar to Magufuli’s legacy is the centralisation of power within the Chama Cha Mapinduzi.

In the early years under founding president Julius Nyerere, Tanzania’s ruling party was dominated by the president and a hierarchy of appointed state and party officials. But, following economic liberalisation in the 1980s and Nyerere’s retirement from politics, the party became steeped in factional rivalries. These were spurred by new political alliances and an emerging private sector business elite.

This factionalism reached its height under Kikwete amid accusations of widespread corruption. Magufuli’s nomination as party presidential candidate only occurred because the rivalry among these factions left him as the unexpected compromise candidate.

Once in office, though, Magufuli quickly signalled he would be nobody’s puppet. He used his position as ruling party chairman to create a “new” Chama Cha Mapinduzi. This involved breaking with party heavyweights, including Kikwete, suppressing factional organising, and consolidating his own support base.

Magufuli’s new base was a cohort of freshly appointed party officials as well as civil servants and cabinet ministers. His loyalists likened these changes to a revival of Nyerere’s Chama Cha Mapinduzi. But, in our view, the comparison is misleading.

Like Magufuli before her, Hassan will be taking office – and party leadership – without her own political base. She will also have to contend with revived factional manoeuvring as sidelined groups try to regain an upper hand.

Hassan could align with a loyal Magufuli faction, which includes influential figures within the party. But, early indications suggest she intends to follow the advice of “party elders”, notably Kikwete. The former president reportedly attended the party’s most recent central committee meeting on Hassan’s invitation.

Aligning herself with Kikwete will likely lead to the reemergence of the internal factional rivalries that characterised the former president’s tenure.

Implications for economic policy

If president Hassan does continue to take a political steer from Kikwete, one likely outcome is that there will be a change in economic policy. In particular, a return to growth that’s led by a more business-friendly approach to the private sector.

Calls are already being made for such a course of action..

The danger for Hassan, however, is that under Kikwete this model was associated with high levels of corruption and unproductive rent-seeking.

A careful reassessment of the Magufuli era is needed to guide future policymaking.

Magufuli used his control over the ruling party to pursue an ambitious policy agenda. This was also linked to his political project of centralising power.

Although this trend actually began under Kikwete, Magufuli accelelrated a move towards more state-led investment. Under his leadership, both state-owned and, increasingly, military-owned enterprises were offered strategic contracts.

This ambitious programme initially won him praise. But over time, his authoritarian decision-making, mismanagement, and lack of transparency prompted a more critical response.

Many state enterprises remained cash-starved, relied on government financial support, and registered losses.

When the government’s controller and auditor general called for more scrutiny of public finances, his budget was slashed. And he was ultimately forced to retire and replaced by a Magufuli loyalist.

Alongside state investment, the president also sought to discipline private sector actors. Some observers suggest that this led to more productive investment, notably by domestic investors. But others point to renewed crony capitalist ties.

Magufuli’s most high profile corporate battle was against Canadian-owned Barrick Gold and its former subsidiary, Acacia Mining. From the two, he demanded USD$190 billion in tax arrears and a renegotiation of operating terms.

Many saw this resource-nationalist approach as an inspiration and a model for African countries seeking to take greater control of their mineral wealth. But in the end – partly due to externally imposed legal and economic constraints – Magufuli walked back on some of his demands. Instead he opted for cooperation rather than confrontation.

He negotiated a joint venture in which Barrick took a majority stake of 84% and Tanzania the remaining 16%. Key elements of the nationalistic mining legislation passed in 2017 were also reversed.

On the plus side gold overtook tourism as Tanzania’s biggest foreign-exchange earner. In addition, some small-scale miners saw their livelihoods improve. Results were more mixed elsewhere, especially for Tanzanite miners in the country’s north.

Ultimately, Magufuli leaves behind a mixed economic legacy. It combines misdirected authoritarian decision-making with positive efforts to pursue an active industrial policy. Reining in unproductive domestic investors and renegotiating adverse contracts with foreign investors were part of this agenda.

There is a risk, given this complex mix, that Tanzania’s policymakers may learn the wrong lessons from his presidency, leading back to the flawed model existing before.

Significantly, neither Magufuli nor his predecessors managed to achieve more inclusive growth. For this reason poverty levels have remained stubbornly high.

The pandemic and beyond

One immediate concern is what steps Hassan will take on the pandemic, and whether she will change direction.

Whatever she does, the health emergency and associated economic crisis will likely define her presidency. It could indeed define the economic trajectory of the African region in years to come.

Both Kikwete and Magufuli ruled through an economic boom period. Commodity prices were high and access to international finance was fairly easy. This gave them latitude to choose between various development approaches.

If Tanzania reverts to the status quo of the Kikwete years, the risk is a reemergence of rent-seeking but without the same highly favourable economic growth conditions. Indeed, as external conditions worsen, Hassan may find her options far more limited.The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Continue Reading

Trending