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Highway Robbery and Sex Toys: Plunder by the Numbers

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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.

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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.

David Ndii
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David Ndii is a leading Kenyan economist and public intellectual.

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What Kenyans Have Always Wanted is to Limit the Powers of the Executive

As Kenya’s political class considers expanding the executive branch of government, no one seems to be talking about restricting its powers.

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The tyranny of numbers, a phrase first applied to Kenyan politics by one of Kenya’s most well-known political commentators, Mutahi Ngunyi, was repeated ad nauseum during the week of waiting that followed Kenya’s 2013 general elections.

In ads published in the run-up to the 2013 elections by the Independent Electoral and Boundaries Commission (IEBC), people were told to vote, go home and accept the results. Encouraged by a state that had since the 2007 post-electoral violence dominated public discourse and means of coercion, the military pitched camp in polling stations. Many streets in Kenya’s cities and towns remained deserted for days after the polls closed.

According to Ngunyi, the winner of the 2013 elections had been known four months earlier, that is, when the electoral commission stopped registering voters.

In a country whose politics feature a dominant discourse that links political party and ethnicity, the outcome of voter registration that year meant that the Uhuru Kenyatta and William Ruto-led coalition, the Jubilee Alliance, would start the electoral contest with 47 per cent of the vote assured. With these statistics, their ticket appeared almost impossible to beat. For ethnic constituencies that did not eventually vote for Uhuru Kenyatta – the Jubilee Alliance presidential candidate in 2013 – a sense of hopelessness was widespread.

For them, a bureaucratic, professionalised, dispassionate (even boring) discourse became the main underpinning of the 2013 elections.

This was not the case in 2017.

Uhuru Kenyatta, pressured by opposition protests and a Supreme Court ruling that challenged his victory and ordered a re-run, met with Raila Odinga – his challenger for the presidency in the 2013 and 2017 elections – and offered a settlement. It became known as the Building Bridges Initiative (BBI).

In his 2020 Jamhuri Day speech, Uhuru reiterated that the purpose of the BBI process is to abolish the winner-takes-all system by expanding the executive branch of government.

As he explained it, the challenge to Kenya’s politics is the politicisation of ethnicity coupled with a lack of the requisite number of political offices within the executive branch that would satisfy all ethnic constituencies – Kenya has 42 enumerated ethnic groups.

The revised BBI report that was released on 21 October 2020 (the first was published in November 2019) has now retained the position of president, who, if the recommendations are voted for in a referendum, will also get to appoint a prime minister, two deputy prime ministers and a cabinet.

Amid heckles and jeers during the launch of the revised BBI report, Deputy President William Ruto asked whether the establishment of the positions of prime minister and two deputy prime ministers would create the much sought-after inclusivity. In his Jamhuri Day speech, the president conceded that they wouldn’t, but that the BBI-proposed position of Leader of Official Opposition – with a shadow cabinet, technical support and a budget – would mean that the loser of the presidential election would still have a role to play in governance.

One could not help but think that the president’s statement was informed by the fact that Odinga lost to him in both the 2013 and 2017 presidential elections –  this despite Odinga’s considerable political influence over vast areas of the country.

The 2010 constitution’s pure presidential system doesn’t anticipate any formal political role for the loser(s) of a presidential election. Raila held no public office between 2013 and 2017, when he lost to Uhuru. This did not help to address the perception amongst his supporters that they had been excluded from the political process for many years. In fact, Raila’s party had won more gubernatorial posts across the country’s 47 counties than the ruling Jubilee Alliance had during the 2013 elections.

While Raila’s attempts to remain politically relevant in the five years between 2013 and 2017 were largely ignored by Uhuru, the resistance against Uhuru’s victory in 2017 wasn’t.

The anger felt by Raila’s supporters in 2017 following the announcement that Uhuru had won the elections – again – could not be separated from the deeply-entrenched feelings of exclusion and marginalisation that were at the centre of the violence that followed the protracted and disputed elections.

The reading of Kenyan politics that is currently being rendered by the BBI process is that all ethnic constituencies must feel that they (essentially, their co-ethnic leaders) are playing a role in what is an otherwise overly centralised, executive-bureaucratic state. This is despite the fact that previous attempts to limit the powers of the executive branch by spreading them across other levels of government have often invited a backlash from the political class.

Kenya’s independence constitution had provided for a Westminster-style, parliamentary system of government, and took power and significant functions of government away from the centralised government in Nairobi, placing significant responsibility (over land, security and education, for instance) in the hands of eight regional governments of equal status known in Swahili as majimbo. The majimbo system was abolished and, between 1964 to 1992, the government was headed by an executive president and the constitution amended over twenty times – largely empowering the executive branch at the expense of parliament and the judiciary. The powers of the president were exercised for the benefit of the president’s cronies and co-ethnics.

By 2010 there was not a meaningful decentralised system of government. The executive, and the presidency at its head, continued to survive attempts at limiting their powers. This has continued since 2010.

As Kenya’s political class considers expanding the executive branch of government, no one seems to be talking about restricting its powers.

Beyond the minimum of 35 per cent of national revenue that the BBI report proposes should be allocated to county governments, it is less clear whether the country’s leaders are prepared to decentralise significant powers and resources away from the executive, and away from Nairobi.

Perhaps the real solution to the challenges of governance the BBI process purports to address is to follow the prescriptions of the defunct Yash Pal Ghai team – it went around the country collecting views for constitutional change in 2003-2004.

According to a paper written by Ghai himself, the Ghai-led Constitution of Kenya Review Commission (CKRC) had no doubt that, consistent with the goals of the review and the people’s views, there had to be a transfer of very substantial powers and functions of government to local levels.

The CKRC noted – much like Uhuru Kenyatta and Raila Odinga now have – that the centralised presidential system tends to ethnicise politics, which threatens national unity.

Kenyans told the CKRC that decisions were made at places far away from them; that their problems arose from government policies over which they had no control; that they wanted greater control over their own destiny and to be free to determine their lifestyle choices and their affairs; and not to be told that they are not patriotic enough!

Yes, the BBI report has proposed that 5 per cent of county revenue be allocated to Members of County Assemblies for a newly-created Ward Development Fund, and that businesses set up by young Kenyans be exempted from taxation for the first seven years of operation. However, this doesn’t amount to any meaningful surrender of power and resources by the executive.

In emphasising the importance of exercising control at the local level, Kenyans told the CKRC that they wanted more communal forms of organisation and a replacement of the infamous Administration Police with a form of community policing. They considered that more powers and resources at the local level would give them greater influence over their parliamentary and local representatives, including greater control over jobs, land and land-based resources.  In short, Kenyans have always yearned for a dispersion of power away from the presidency, and away from the executive and Nairobi. They have asked for the placing of responsibility for public affairs in the hands of additional and more localised levels of government.

This is what would perhaps create the much sought-after inclusivity.

But as the BBI debate rages on, the attention of the political class is now on the proposed new positions within the executive branch. And as the debate becomes inexorably linked to the 2022 Kenyatta-succession race, questions centring on political positions will likely become personalised, especially after the political class cobbles together coalitions to contest the 2022 general elections.

Meanwhile, ordinary Kenyans will be left battling the aftermath of a pandemic, and having to deal with the usual stresses brought on by a political class seeking their votes for another round of five years of exclusion.

The more things change, the more they remain the same.

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Democracy for Some, Mere Management for Others

The coming election in Uganda is significant because if there is to be managed change, it will never find a more opportune moment.

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Western powers slowly tied a noose round their own necks by first installing Uganda’s National Resistance Movement regime, and then supporting it uncritically as it embarked on its adventures in militarism, plunder and human rights violations inside and outside Uganda’s borders.

They are now faced with a common boss problem: what to do with an employee of very long standing (possibly even inherited from a predecessor) who may now know more about his department than the new bosses, and who now carries so many of the company’s secrets that summary dismissal would be a risky undertaking?

The elections taking place in Uganda this week have brought that dilemma into sharp relief.

An initial response would be to simply allow this sometimes rude employee to carry on. The problem is time. In both directions. The employee is very old, and those he seeks to manage are very young, and also very poor and very aspirational because of being very young. And also therefore very angry.

Having a president who looks and speaks like them, and whose own personal life journey symbolises their own ambitions, would go a very long way to placating them. This, if for no other reason, is why the West must seriously consider finding a way to induce the good and faithful servant to give way. Nobody lives forever. And so replacement is inevitable one way or another.

But this is clearly not a unified position. The United Kingdom, whose intelligence services were at the forefront of installing the National Resistance Movement/Army (NRM/A) in power nearly forty years ago, remains quietly determined to stand by President Yoweri Museveni’s side.

On the other hand, opinion in America’s corridors of power seems divided. With standing operations in Somalia, and a history of western-friendly interventions in Rwanda, the Democratic Republic of Congo, South Sudan, and even Kenya, the Ugandan military is perceived as a huge (and cut-price) asset to the West’s regional security concerns.

The DRC, in particular, with its increasing significance as the source of much of the raw materials that will form the basis of the coming electric engine revolution, has been held firmly in the orbit of Western corporations through the exertions of the regime oligarchs controlling Uganda’s security establishment. To this, one may add the growing global agribusiness revolution in which the fertile lands of the Great Lakes Region are targeted for clearing and exploitation, and for which the regime offers facilitation.

Such human resource is hard to replace and therefore not casually disposed of.

These critical resource questions are backstopped by unjust politics themselves held in place by military means. The entire project therefore hinges ultimately on who has the means to physically enforce their exploitation. In our case, those military means have been personalised to one individual and a small circle of co-conspirators, often related by blood and ethnicity.

However, time presses. Apart from the ageing autocrat at the centre, there is also a time bomb in the form of an impoverished and anxious population of unskilled, under-employed (if at all) and propertyless young people. Change beckons for all sides, whether planned for or not.

This is why this coming election is significant. If there is to be managed change, it will never find a more opportune moment. Even if President Museveni is once again declared winner, there will still remain enough political momentum and pressure that could be harnessed by his one-time Western friends to cause him to look for the exit. It boils down to whether the American security establishment could be made to believe that the things that made President Museveni valuable to them, are transferable elsewhere into the Uganda security establishment. In short, that his sub-imperial footprint can be divorced from his person and entrusted, if not to someone like candidate Robert Kyagulanyi, then at least to security types already embedded within the state structure working under a new, youthful president.

Three possible outcomes then: Kyagulanyi carrying the vote and being declared the winner; Kyagulanyi carrying the vote but President Museveni being declared the winner; or failure to have a winner declared. In all cases, there will be trouble. In the first, a Trump-like resistance from the incumbent. In the second and the third, the usual mass disturbances that have followed each announcement of the winner of the presidential election since the 1990s.

Once the Ugandan political crisis — a story going back to the 1960s — is reduced to a security or “law and order” problem, the West usually sides with whichever force can quickest restore the order they (not we) need.

And this is how the NRM tail seeks to still wag the Western dog: the run-up to voting day has been characterised by heavy emphasis on the risk of alleged “hooligans” out to cause mayhem (“burning down the city” being a popular bogeyman). The NRM’s post-election challenge will be to quickly strip the crisis of all political considerations and make it a discussion about security.

But it would be strategically very risky to try to get Uganda’s current young electorate — and the even younger citizens in general — to accept that whatever social and economic conditions they have lived through in the last few decades (which for most means all of their lives given how young they are) are going to remain in place for even just the next five years. They will not buy into the promises they have seen broken in the past. Their numbers, their living conditions, their economic prospects and their very youth would then point to a situation of permanent unrest.

However, it can be safely assumed that the NRM regime will, to paraphrase US President Donald Trump, not accept any election result that does not declare it the winner.

Leave things as they are and deal with the inevitable degeneration of politics beyond its current state, or enforce a switch now under the cover of an election, or attempt to enforce a switch in the aftermath of the election by harnessing the inevitable discontent.

Those are the boss’ options.

In the meantime, there is food to be grown and work to be done.

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Uganda Elections 2021: The Elephant Website Blocked Ahead of Poll

For about a month now, some of our readers within Uganda have been reporting problems accessing the website. Following receipt of these reports, we launched investigations which have established that The Elephant has been blocked by some, though not all, internet service providers in the country.

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Dear Readers/Viewers,

For four years now, The Elephant has been one of the premier online sources of news analysis in the East African region with a fast-growing readership across the African continent and beyond.

For about a month now, some of our readers within Uganda have been reporting problems accessing the website. Following receipt of these reports, we launched investigations which have established that The Elephant has been blocked by some, though not all, internet service providers in the country.

We have further ascertained that the directive to do so came from the Uganda Communication Commission (UCC) and was implemented beginning 12 December 2020, when we noticed a sudden traffic drop coming from several providers in Uganda, including Africell and Airtel. A forensics report, which provides technical details on the blocking, is available here.

We have written to the UCC requesting a reason for the blocking but are yet to receive a response.

The Elephant wholeheartedly condemns this assault on free speech and on freedom of the press and calls on the Ugandan government to respect the rights of Ugandans to access information.

We would like to assure all our readers that we are doing everything in our power to get the restrictions removed and hope normal access can be restored expeditiously.

As we do this, to circumvent the block, a Bifrost mirror has been deployed. Readers in Uganda can once again access The Elephant on this link.

Thank you.

Best Regards

John Githongo
Publisher

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