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Hustler Nation: Jobless Youth, Millennial Angst and the Political Economy of Underachievement

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Millennials should be the biggest beneficiaries of the demographic dividend, that virtuous cycle of rising savings, investment, growth and lower dependency. Instead, one in four want to leave and almost 70 percent cite unemployment as their biggest challenge. Here’s why – and how we can reverse the trend. By DAVID NDII

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Hustler Nation: Jobless Youth, Millennial Angst and the Political Economy of Underachievement
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One out of four youths want to leave Kenya. They are disillusioned by what they see as lack of opportunities, corruption and tribalism. This is according to a recent study conducted by the British Council, titled ‘Next Generation Kenya’. The study interviewed 4000 young people aged 15 – 24 across the country.

These sentiments chime with a series of reflections by millennials published by The Elephant, that I have found revealing and intriguing. I was particularly struck by the millennials’ sense of a generational solidarity. I have no recollection of being similarly aware of such a connectedness with my age group outside my small circle of friends and professional peers. But then again, there was no internet or social media to spread generational memes. Though I have come across this demographic alphabet soup from marketers, I have until now been completely oblivious that I am a Generation X and we are responsible for all the millennial angst. I was also struck by the disconnect between the expectations and reality. Erudite though they are, the millennial writers seem unaware that they live in a poverty-stricken politically dysfunctional country in which only a very tiny minority gets a shot at living out their dreams.

Unemployment is the millennials’ biggest challenge by far, cited by 67 percent of the respondents.

Dear millennials, I have news for you.

An economy with a youth bulge such as we are experiencing should be cashing in on a demographic dividend. A demographic dividend is a virtuous cycle of rising saving, investment and growth associated with transition from high to low dependency population structure. Dependency ratio, which is the proportion of children and old people for each working-age adult, tells you how many dependents each income is supporting. A high dependency ratio undermines saving and investment.

Kenya’s dependency ratio has declined from a peak of 113 dependents per 100 working age adults in the early 80’s to 76 per 100 today. A decline of 36 per 100 is huge in three decades. It is in fact, one of the most dramatic in history. Our youth population is well educated by any standards, tech-savvy even, and we are told that we are one of Africa’s most attractive investment destinations. But far from rising, investment is trending downwards from 20 percent of GDP five years ago to 18 percent last year. This is despite Jubilee’s huge infrastructure spending, meaning that private investment rate has fallen precipitously. Sixty percent of the millennials interviewed in the British Council study said they were dependents. A demographic dividend is not evident.

Demographic dividends are not assured. Reaping it is subject to other enabling factors, in particular political stability, a favourable investment climate, and the youth need to be educated (not trained, but trainable). If these factors are not there, and the requisite investment fails to materialize, a demographic transition can turn into a political nightmare. The 90s wave of civil strife in West Africa, the Zimbabwe crisis and the Arab Spring all have elements of demographic transition.

Kenya’s dependency ratio has declined from a peak of 113 dependents per 100 working age adults in the early 80’s to 76 per 100 today. A decline of 36 per 100 is huge in three decades. It is in fact, one of the most dramatic in history. Our youth population is well educated by any standards, tech-savvy even, and we are told that we are one of Africa’s most attractive investment destinations. Bur far from rising, investment is trending downwards from 20 percent of GDP five years ago to 18 percent last year.

East Asia is the “go to” place to see how to cash in on a demographic dividend. The Asian Tiger’s export-led industrialization is now the stuff of legend. One of the less remarked aspects of the so called East Asian economic miracle is that it was unheralded. In those days, the leading development gurus were export pessimists. What made the East Asian leaders defy the economic wisdom of the day? There are many theories about this. My take is that they did not set out to perform miracles and become economic powerhouses. They set out to improve the lot of their people. This much one can discern by reading Lee Kwan Yew’s memoir From Third World to First: The Singapore Story. The economic miracle was a consequence, not a goal.

Ours not so.

By their own admission, the new managers of independent Kenya saw an opportunity to get rich. They could not resist it. In 1971, the Public Service Structure and Remuneration Commission popularly known as the Ndegwa Commission, summed it up thus:

“The achievement of independence in Kenya has brought with it great opportunities for individual advancement both as to main careers and in other less orthodox ways. It is understandable that public servants should have taken their opportunities like other citizens but if the benefits in some cases seem out to be out of proportion with other citizens it is inevitable that questions be asked as to how this came about.”

But the Commission went on to (in)famously applaud self-enrichment in public office: “There ought in theory to be no objection to the ownership of property or involvement in businesses by members of the public services to the point where their wealth is augmented perhaps substantially by such activities.” Ignore the “in theory” part— it was, and still is, all practice.

In a nutshell, when East Asian leaders were asking prospective investors what they needed to do for them, ours were asking what was in it for them.

What made the East Asian leaders defy the economic wisdom of the day? My take is that they did not set out to perform miracles and become economic powerhouses. They set out to improve the lot of their people. The economic miracle was a consequence, not a goal. Ours not so.

At around the time of the Ndegwa Commission Report, a high powered ILO mission in its report Employment, Incomes and Inequality: A strategy for increasing productive employment in Kenya noted:

“A search for the causes of persistent inequities and unemployment in spite of rapid growth since independence must start with the colonial situation. Kenya inherited a very lop-sided economy already organized for the effective maintenance of very different ways of life for a tiny minority on the one hand, and a very large majority on the other. Kenyanization has radically changed the racial composition of the group of people in the centre of power and many of its policies, but has had only a limited effect on the mechanisms which maintain its dominance. The power of the centre over the periphery may well be greater today than it was before.”

The ILO report was the first policy document to highlight the role of the informal economy, and to recognize its potential: “The informal sector provides income-earning opportunities for a large number of people. Though it is often regarded as unproductive and stagnant, we see it as providing a wide range of low-cost, labour intensive, competitive goods and services. Not only does it provide them without the benefit of the government subsidies and support that are received by the many firms in the formal sector, but operators in the informal sector are often harassed and hampered by restrictions imposed from outside.”

The advice went unheeded. As one Upton Sinclair observed many years ago, it is difficult to make a person understand something when their income depends on not understanding it. The policy makers the ILO mission was advising were the owners of subsidies and support they were dishing out to the formal sector firms.

In 2003, we wrote an economic recovery strategy that sought to engineer a paradigm shift in state policy from the “trickle down” economics of Sessional Paper No. 10 of 1965 as described above, to a “bottom up” strategy focused on raising productivity of resource poor smallholder farmers, pastoralists and the informal sector, in short, improving the lot of the people. This column has recounted on several occasions how that paradigm shift was frustrated by the so-called owners of capital culminating in restoration of trickle down economics a la Vision 2030.

The ILO report was the first policy document to highlight the role of the informal economy, and to recognize its potential. The advice went unheeded. As one Upton Sinclair observed many years ago, it is difficult to make a person understand something when their income depends on not understanding it. The policy makers the ILO mission was advising were the owners of subsidies and support they were dishing out to the formal sector firms.

 According to a study on dairy productivity by Tegemeo Institute, our “go-to” think tank on matters agricultural policy, our smallholder farmers obtained on average 1344 kg of milk per cow (data is for 2010 but it will suffice to illustrate). The bottom fifth (“quintile” in statistical jargon) obtained 600 kg per cow while the top fifth obtained more than three times as much, at 1,960 kg per cow. What accounts for this differential? The type of cattle is the most significant. Seventy percent of the cattle kept by farmers in the bottom were traditional breeds, while 70 percent of the cattle in the top quintile are improved breeds. Breeding cattle is not rocket science.

Increasing the average production per cow to equal the top quintiles 1,960 kg translates to an increase in milk output by two million tonnes per year, from 4.3 to 6.3 million tonnes. At Ksh. 35 per kilogramme. this translates to an additional Ksh. 70 billion shillings worth of raw milk per year. But in fact 1,960 kg per cow is quite low— it works out to only 6 kg per cow per day. Githunguri farmers, the most productive in the country do an average of 6800 kg per year, a respectable 18 kg per cow. Raising the average for all smallholders to half of that translates to close to an additional 6.5 million tonnes worth Ksh. 230 billion. These are not small numbers: Ksh 230 billion is more than Safaricom’s 2017 turnover (Ksh. 212 billion).

Productivity gaps of this kind are everywhere particularly in agriculture. Last year, we slaughtered 2.6 million cattle. The average carcass weight of the cattle we slaughter is 110 kg, against a potential 180 kg. This is explained by the fact that our cattle are taken off directly from pastoralists herds and trekked long distances to market. This is a loss of 180,000 tonnes of beef which translates to Ksh. 50 billion of forgone income to producers.

Pastoralists’ productivity can be easily raised by establishing finishing (fattening) facilities for the pastoralist communities, and providing proper cattle trucks to take animals to the market. But for some reason, the livestock authorities are preoccupied with abattoirs. I have failed to understand how slaughtering scrawny animals in fancy abattoirs adds value— a cow slaughtered under a tree or in an abattoir gives you the same beef. I suspect that they think that having modern abattoirs is industrialization.

Githunguri farmers, the most productive in the country, do an average of 6800 kg per year, a respectable 18 kg of milk per cow. Raising the average for all smallholders to half of that translates to close to an additional 6.5 million tonnes worth Ksh. 230 billion. These are not small numbers: Ksh 230 billion is more than Safaricom’s 2017 turnover (Ksh. 212 billion).

It is readily apparent how improving the lot of poor smallholder farmers would create jobs. The farmers have more money to spend. There is more produce to transport, process and distribute—more jobs. Productivity growth is a win-win for everyone, producers, consumers, processors, distributors, and suppliers. Food becomes cheaper for consumers but farmers make more money because they are producing a lot more, just as the affordability of mobile phones has spawned an industry that is now more than five percent of GDP.

Remarkably, an inclusive competitive, job-creating economy would make for a bigger more profitable market for the said state elite. Some of them see it, but how to extricate themselves from the monster they have created? That is the nature of greed—the head is willing, the heart even, but the stomach is weak.

An inclusive competitive, job-creating economy would make for a bigger more profitable market for the state elite. Some of them see it, but how to extricate themselves from the monster they have created? That is the nature of greed—the head is willing, the heart even, but the stomach is weak.

 “Nothing” wrote Jean Jacques Rosseau, “is more dangerous than the influence of private interests in public affairs. The abuse of the laws by the government is a lesser evil than the corruption of the legislator. In such a case, the State being altered in substance, all reformation becomes impossible.”

So there you have it dear millennials. You are on your own.

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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Uganda Elections 2021: The Elephant Website Blocked Ahead of Poll
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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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