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A Question of Power: Why Ethiopia’s Economic Transformation Is a Cautionary African Tale

9 min read. The arrival of reformist Prime Minister, Abiy Ahmed Ali, may have only given the ruling EPRDF a stay of execution. At the heart of the political crisis is an old problem: a command economy reluctant to liberalise. State-led infrastructure expansion fuelled a decade of miraculous growth, producing five times more electricity than the country requires. The returns on this investment are not forthcoming. Exports are falling, the Birr has been devalued; a severe forex shortage is underway. Is Ethiopia’s future as Africa’s premier power exporter viable? By DAVID NDII.

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A Question of Power: Why Ethiopia’s Economic Transformation Is a Cautionary African Tale
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Something is stirring in Ethiopia. It began with the abrupt resignation of former Prime Minister Hailemariam Desalegn on February 15. After weeks of backroom dealmaking the EPRDF coalition which has governed Ethiopia with an iron fist since ousting the Derg, Mengistu Haire Mariam’s Marxist dictatorship in 1991, elevated youthful Abiy Ahmed Ali as prime minister. The new prime minister hit the ground running with a raft of political reforms.

Three years ago, students in the town of Ambo started a protest to oppose a metropolitan development plan that would have incorporated their town and seven others into the capital, Addis Ababa. Ambo is 120 kilometres west of Addis in the Oromia region. They accused the federal government of a top-down land grab that would deprive them of livelihoods and destabilize their communities and culture.

After the overthrow of the Derg, Ethiopia adopted an ethno-federalist constitution that even provides for orderly secession. But the EPRDF has sought to run a command-and-control developmental state. The Addis Ababa expansion plan was a head-on-collision between the two—the constitution’s federalist ethno-regional political bargain and the centralizing ideology and power politics of the EPDRF. While the EPRDF is a consociational coalition, it’s the late strongman Meles Zenawi’s Tigrayan People’s Liberation Front (TPLF), which led the liberation war, that wields most of the power in the coalition (and gets most of the spoils). The Tigrayans are a relatively small tribe (six percent of the population) from the north of the country.

The Addis expansion plan, which affected the Oromo and Amhara regions, ignited discontent whose depth the EPDRF clearly underestimated. The Oromo are the largest ethnic group in Ethiopia, accounting for a third of Ethiopia’s 100 million-strong population, with strong grievances of historic marginalization. The Amhara, who constitute just over a quarter of the population, are the erstwhile politically dominant ethnic group. Both Emperor Haile Selassie and Mengistu were Amhara (his father, originally Oromo, was adopted by an Amhara nobleman). Repression, including massacres, mass incarcerations and a state of emergency, a feature of both Emperor Selassie’s late rule and Mengistu’s Red Terror, returned under a beleaguered EPRDF.

Though unexpected, Desalegn’s resignation was preceded by a softening of the regime, including the release of political prisoners, which Desalegn said was meant to “foster national reconciliation”. The new prime minister is Oromo. His elevation was no doubt intended as an olive branch to the restive region.

The Addis Expansion Plan, which affected the Oromo and Amhara regions, ignited discontent whose depth the EPDRF had clearly underestimated…Repression, including massacres, mass incarcerations and a state of emergency, a feature of both Emperor Selassie’s late rule and Mengistu’s Red Terror, returned under a beleaguered EPRDF.

Hot on the heels of the tectonic shift in the politics have come equally momentous economic pronouncements. State owned Ethiopian Airlines and telecommunications and power utilities and other state corporations are to be partially privatized.

What exactly is cooking in Addis?

In his pronouncement speech, the Prime Minister Abiy spoke of a hard currency crisis. He is quoted in the media castigating his audience, Ethiopian businesspeople, for keeping their hard currency in Dubai and China and asking for their cooperation to resolve the crisis while also threatening unspecified actions on the hoarders of foreign exchange. Instructively, he also disclosed that the political crisis has dented diaspora remittances. Diaspora remittances are Ethiopia’s single largest source of foreign exchange, bringing in US$ 5.5 billion last year, almost double the country’s US$ 3 billion dollar export earnings.

The foreign exchange crisis is not new. In October last year, Ethiopia devalued the currency by 15 percent. While the recent government data shows foreign currency reserves equivalent to 2.3 months import requirements in December 2017, precarious but not dire (3-4 months requirements is the norm), some analysts say the reserves could have fallen below one month’s requirement, which is dire. Last week, the government announced that it had secured a US$1 billion foreign currency lifeline from the United Arab Emirates (UAE), part of a US$3billion aid and investment package. The UAE deal looks like a quid pro quo for Prime Minister Abiy’s de-escalation of tensions with Egypt over Ethiopia’s damming of the Blue Nile. The UAE is a strong ally of Egypt. This sequence of events begins to suggest that the foreign currency crunch is behind the softening of the EPDRF regime.

Prime Minister Abiy spoke of a hard currency crisis. [He castigated] his audience, Ethiopian businesspeople, for keeping their hard currency in Dubai and China and asked for their cooperation to resolve the crisis while also threatening unspecified actions on the hoarders of foreign exchange. Instructively, he also disclosed that the political crisis has dented diaspora remittances. Diaspora remittances are Ethiopia’s single largest source of foreign exchange, bringing in US$ 5.5 billion last year, almost double the country’s US$ 3 billion dollar export earnings.

Ethiopia has run into an old, mostly forgotten, economic development problem: the foreign exchange constraint. In the old days, it was caused by import substitution industrialisation. Import substitution industrialisation, the dominant development strategy for many sub-Saharan African states until the mid-seventies, entailed setting up industries to produce finished goods the country was importing, and protecting them from import competition with trade barriers, import and foreign exchange controls.

The new import substituting industries imported virtually everything from machinery, intermediate inputs, spare parts, technology and even management. The import substituting industry’s foreign exchange requirements ended up exceeding what the country was using to import the finished goods. Most of the import substitution industrializers relied on a few primary commodity exports. They soon found that their export earnings were insufficient to finance the industries.

Foreign exchange became scarce, and self-reinforcing. To circumvent foreign exchange rationing, businesses would hoard foreign exchange abroad through transfer pricing (over-invoicing imports and under-invoicing exports), compounding the primary motive for transfer pricing— tax evasion. One such scheme came to light not too long ago during the unravelling of the Nairobi Securities Exchange-listed corporate icon, CMC, which has since been delisted. It was revealed that the company had maintained a secret account in Jersey to which proceeds of over-invoicing were deposited and paid to its directors offshore. Remarkably, many of the beneficiaries of the scheme were the same bureaucrats who were responsible for enforcing foreign exchange controls.

The 1973 oil-shock and declining primary commodity prices in the ‘70s compounded the external imbalance that import substitution industrialization started. By the early ‘80s, most import substituting countries were on their knees. In some, Tanzania for example, manufacturing ground to a halt.

Ethiopia’s external imbalance and attendant foreign exchange crises emanate from over-investment in infrastructure. Ethiopia adopted an infrastructure-led growth strategy known as the Growth and Transformation Plan (GTP) in 2010. It has since doubled electricity generation from 1800 to 4200 MW, against peak power requirement of 2000 MW. There is close to 7,000MW of new power projects under construction. The Ethiopia Grand Renaissance dam alone has a capacity of 6450 MW. When these are completed, Ethiopia’s generation capacity will be more than four times domestic demand. The road network has been expanded two-and-a-half fold, from 44 km to 110 km of road per 1000 square kilometres. And there is of course the 670-km Addis-Djibouti railway, and a light rail system for Addis Ababa, operational since late 2015 .

The infrastructure building boom, described in a recent World Bank report as “one of the highest rates of public investment in the world”, turbocharged Ethiopia’s economic growth rate from a respectable 5-6 percent to an exceptional 10 percent per year. But close to a decade on, the anticipated private investment that would enable Ethiopia to pay for it has not materialised. Ethiopia was banking on export processing zones investment, and has built several industrial parks around the country.

Besides failing to attract investment, building booms of this magnitude have the effect of shifting incentives against “tradable” sectors of the economy. This phenomenon is more commonly associated with natural resource booms that economists call Dutch Disease. This is reflected in the decline of Ethiopia’s export to GDP ratio, from 17 percent to eight percent of GDP compared to Sub-Saharan average of 27 percent. Its export to GDP ratio is now the second lowest on the sub-continent after Burundi (6.2%).

Ethiopia has compounded its infrastructure-driven external imbalance with classic import substitution—a massive state-drivend sugar industry expansion. The state-owned Ethiopia Sugar Corporation is currently developing ten large-scale sugar projects that will put a million acres of land under sugarcane production. A capital intensive, low value product with distorted markets and a permanent global glut floating in the high seas, sugar is as bad as import substitution industries get. Yet there is no shortage of export-oriented agriculture investments Ethiopia could have chosen. Oilseeds are Ethiopia’s second largest export earner after coffee. It has a promising livestock and leather apparel industry. Maize even.

The Bretton Woods institutions spent the ‘80s and ‘90s preaching the free market economic orthodoxy known as the Washington Consensus. Ethiopia has done the complete opposite. But the World Bank has been nothing but effusive. In a 2016 report, Ethiopia’s Great Run: The Growth Acceleration and How to Pace it, the World Bank asserts confidently that Ethiopia was on course to become a middle income country by 2025. Astoundingly the World Bank goes ahead to give a thumbs up to the policy regime that its structural adjustment programmes (SAPs) dismantled:

“Heterodox financing arrangements supported one of the highest public investment rates in the world. Three less conventional mechanisms stand out: first, a model of financial repression that kept interest rates low and directed the bulk of credit towards public infrastructure. Second, an overvalued exchange rate that cheapened public capital imports. Third, monetary expansion, including direct Central Bank budget financing, which earned the government seignorage revenues.”

Ethiopia has compounded its infrastructure-driven external imbalance with classic import substitution—a massive state-driven sugar industry expansion. The state-owned Ethiopia Sugar Corporation is currently developing ten large-scale sugar projects that will put a million acres of land under sugarcane production. A capital intensive, low value product with distorted markets and a permanent global glut floating in the high seas, sugar is as bad as import substitution industries get.

Heterodox means unorthodox or unconventional. In plain English, it means distorting credit markets, overvaluing the currency and printing money.

 After all the cheerleading, the Bretton Woods sisters now find themselves in an awkward situation. In its most recent debt sustainability report, the IMF acknowledges that Ethiopia is now staring at a debt crisis. It has no advice to give. Ethiopia’s hopes, it writes, now rest on exporting electricity. The IMF posits that Ethiopia has the potential to earn US$ 1 billion a year from selling electricity.

In reality, Ethiopia is selling a little power to Sudan and Djibouti, and has signed power purchase agreements with Kenya and Tanzania. But these countries are ramping up their own generation capacity. Kenya’s installed capacity is presently 35 percent above peak generation requirements excluding the 340 MW Turkana wind power which is awaiting completion of a transmission line, 55 percent when it is included. There are several other projects underway, and Kenya’s government seems dead set on proceeding with a controversial 1000MW coal plant in Lamu. Ditto Tanzania.

After all the cheerleading, the Bretton Woods sisters now find themselves in an awkward situation. In its most recent debt sustainability report, the IMF acknowledges that Ethiopia is now staring at a debt crisis. It has no advice to give. Ethiopia’s hopes, it writes, now rest on exporting electricity. The IMF posits that Ethiopia has the potential to earn US$ 1 billion a year from selling electricity.

Ethiopia’s biggest electricity customer potentially is Egypt. This may begin to explain the reason for the olive branch. Prime Minister Abiy also made a quick visit to Somalia last week. He might be hoping to sell some electricity there. To flog a billion dollars worth of power, Ethiopia will need to make peace with all her neighbours, and then some. If truth be told, the electricity export bonanza is a fig leaf.

There is a cold reality that the Ethiopian government seems to be still in denial about. Its heterodox macroeconomic regime is now untenable Investors do not like putting their money in places where it is difficult to get out. And now that people know how precarious the situation is, hard currency hoarding and capital flight will get worse, not better.

The competing destinations for the export processing investment that Ethiopia is building industrial parks for do not have exchange controls. And Ethiopia has many disadvantages to overcome, not least, being landlocked, not to mention its byzantine bureaucracy and anti-capitalist instinct. Financial liberalisation is inevitable, a matter of when and how, not if. The Prime Minister talked of the foreign exchange problem being a long term problem. He is dead wrong. He has eighteen months—best case scenario. His options boil down to whether to do big bang or gradual – rather like choosing whether to do your root canals all at once or every other week.

The announced fire sale of family silver will not do it either. Deregulation should precede privatisation otherwise it substitutes public monopolies for private ones. In the case of the telecom monopoly in particular, deregulation will kill a whole flock of birds with one stone—bring in hard currency from license fees, investment, access (at 40% Ethiopia’s mobile penetration is the lowest in the region) and quality of services. The sugar factories I would sell right away on an “as-is-where-is” basis. A stitch in time saves nine.

Ethiopia is by no means the only country floundering on infrastructure-led growth. It is a foolish idea. Monuments, delusions of grandeur, cargo cults—this columnist has all but run out of metaphors. Last year, Zambia’s President called a national day of prayer for the Kwacha. Last week he suspended borrowing and instituted an austerity programme that includes freezing projects that are less than 80 percent complete. Kenya is surviving on speculative capital inflows and juggling debt as it negotiates an IMF bailout.

Ethiopia’s unravelling is a reflection of its macroeconomic policy regime. When demand and supply don’t balance, something must give. In a liberal regime it is prices that adjust (exchange rate, interest, and inflation). If prices are controlled then demand or supply must give, in this case, the supply of foreign exchange. Still, the crisis has provided an opportunity for transformational political and economic change. To quote economist Paul Romer, a crisis is a terrible thing to waste.

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

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South Africa: Xenophobia Is in Fact Afrophobia, Call It What It Is

5 min read. Anti-African violence in South Africa is fuelled by exclusion, poverty and rampant unemployment. This isn’t black-on-black violence. This is poor-on-poor violence.

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South Africa: Xenophobia Is in Fact Afrophobia, Call It What It Is
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Written in May 2008, as African bodies burned on the streets of South Africa, Ingrid De Kok’s throbbing poem Today I Do Not Love My Country poignantly captures the mood of an Afrophobic nation fluent in the language of violence and name-calling.  (I say Afrophobic because South Africa does not have a xenophobia problem. We don’t rage against all foreigners—just the poor, black ones from Africa.)

The irony of South Africa’s most recent attacks on African immigrants is that they happened in the wake of the African Continental Free Trade Agreement which positions the country as an economic gateway to the continent. As the debris is cleared off the streets of Johannesburg after a week of violent looting and attacks against African migrant-owned businesses that saw eleven people killed and almost 500 arrested, Pretoria now faces calls to boycott South African-owned businesses on the continent.

Zambia and Madagascar cancelled football matches. Air Tanzania has suspended flights to South Africa. African artists are boycotting South Africa. Should an Afrophobic South Africa lead the African Union next year?

The irony of South Africa’s most recent attacks on African immigrants is that they happened in the wake of the African Continental Free Trade Agreement which positions the country as an economic gateway to the continent

The South African government has remained steadfast in its denial of Afrophobia, opting instead to condemn “violent attacks” and highlight the criminal elements involved in looting African-owned businesses. The police attributed the attacks to “opportunistic criminality”. By denying that these are Afrophobic attacks, everyone can deny the role of South Africa’s political leadership in fomenting the hatred.

The Afrophobic attacks are not spontaneous criminal mobs preying on foreigners. They are the result of an orchestrated, planned campaign that has been fuelled by the ongoing anti-immigrant rhetoric of South African politicians.

The All Truck Drivers Forum (ATDF), Sisonke People’s Forum and Respect SA stand accused of orchestrating last week’s violence. ATDF spokesperson, Sipho Zungu, denied that his group had instigated the violent looting, saying that “the nation is being misled here.” Zungu did stress, however, that South African truck drivers “no longer have jobs” and the government “must get rid of foreign truck drivers.”

Zungu echoes the sentiments of many poor South Africans, and their views are the end result of a drip-feed of anti-immigrant messages from South African politicians, particularly in the run-up to this year’s elections.

Anti-African violence in South Africa is fuelled by exclusion, poverty and rampant unemployment. This isn’t black-on-black violence. This is poor-on-poor violence.

One-third of South Africans are unemployed. Thirteen per cent of South Africans live in informal settlements, and a third of South Africans don’t have access to running water. The problems are a combination of the country’s apartheid past and rampant corruption and mismanagement within the ANC-led government. Crime is climbing, mainly due to corrupt and dysfunctional policing services, high unemployment and systemic poverty.

By denying that these are Afrophobic attacks, everyone can deny the role of South Africa’s political leadership in fomenting the hatred.

South African politicians from across the spectrum have blamed immigrants for the hardships experienced by poor South Africans. Political parties tell voters that foreigners are criminals flooding South Africa, stealing their jobs, homes and social services, undermining their security and prosperity.

Even the government sees poor and unskilled African migrants and asylum seekers as a threat to the country’s security and prosperity. Approved in March 2017, its White Paper on International Migration, separates immigrants into “worthy” and “unworthy” individuals. Poor and unskilled immigrants, predominantly from Africa, will be prevented from staying in South Africa by any means, “even if this is labelled anti-African behaviour” as the former Minister of Home Affairs, Hlengiwe Mkhize, pointed out in June 2017. The message is simple: there is no place for black Africans in South Africa’s Rainbow Nation.

In November 2018, Health Minister Aaron Motsoaledi claimed in a speech at a nurses summit that undocumented immigrants were flooding South Africa and overburdening clinics and hospitals. When immigrants “get admitted in large numbers, they cause overcrowding, infection control starts failing”, he said.

Johannesburg—the epicentre of the anti-African violence—is run by the Democratic Alliance (DA), the second-largest political party in South Africa after the ruling African National Congress (ANC). DA mayor, Herman Mashaba, has been leading the war against African immigrants.

In a bid to attract more support, Mashaba and the DA have adopted an immigrant-baiting approach straight out of Donald Trump and Jair Bolsonaro’s playbooks.

Mashaba has described black African migrants as criminals and has spoken of the need for a “shock-and-awe” campaign to drive them out.

In February 2019, Mashaba diverted attention away from protests against his administration’s poor service delivery in Johannesburg’s Alexandra township by tweeting that foreigners had made it difficult to provide basic services.

On August 1, police operations in Johannesburg to find counterfeit goods were thwarted by traders who pelted law-enforcement authorities with rocks, forcing the police to retreat. Social media went into overdrive, with many accusing the police of being cowards running away from illegal immigrants. Mashaba was “devastated” by the police’s restraint. A week later over 500 African immigrants were arrested after a humiliating raid, even though many said they showed police valid papers.

In 2017, South Africa’s deputy police minister claimed that the city of Johannesburg had been taken over by foreigners, with 80% of the city controlled by them. If this is not urgently stopped, he added, the entire country “could be 80% dominated by foreign nationals and the future president of South Africa could be a foreign national.”

None of this anti-immigrant rhetoric is based on fact. Constituting just 3% of the South African population, statistics show that immigrants are not “flooding” South Africa. They aren’t stealing jobs from South Africans and nor are they responsible for the high crime rate. South Africa’s crime problem has little to do with migration, and everything to do with the country’s dysfunctional policing services, unemployment and poverty.

Johannesburg—the epicentre of the anti-African violence—is run by the Democratic Alliance (DA), the second-largest political party in South Africa after the ruling African National Congress (ANC). DA mayor, Herman Mashaba, has been leading the war against African immigrants.

But South African politicians don’t let facts get in the way.  After all, it’s easier to blame African immigrants rather than face your own citizens and admit that you’ve chosen to line your own pockets instead of doing your job. If you can get others to shoulder the blame for the hopeless situation that many South Africans find themselves in, then why not?

South Africans are rightfully angry at the high levels of unemployment, poverty, lack of services and opportunities. But rather than blame African immigrants, frustration must be directed at the source of the crisis: a South African political leadership steeped in corruption that has largely failed its people.

The African Diaspora Forum, the representative body of the largest group of migrant traders, claimed that the police failed to act on intelligence that it had provided warning of the impending attacks. It took almost three days before Cyril Ramaphosa finally issued weak words of condemnation and for his security cluster to meet and strategise.  All of this points to a government refusing to own its complicity and deal with the consequences of its words.

South Africa has fallen far and hard from the lofty Mandela era and Thabo Mbeki’s soaring “I am an African” declaration.

Senior political leaders in South Africa are blaming vulnerable Africans for their failure to adequately provide a dignified life for all South Africans. Until this scapegoating stops, violent anti-African sentiment will continue to thrive, and South Africa will entrench its growing pariah status on the continent.

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A New Despotism in the Era of Surveillance Capitalism: A Reflection on Census 2019

6 min read. In the creeping securocratisation of every sphere of the State, the incessant threats and arbitrary orders, the renewed quest for that elusive all-encompassing kipande, and even the arbitrary assignment of identity on citizens, Montesquieu would see a marked deficiency of love for virtue, the requisite principle for a democratic republic.

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A New Despotism in the Era of Surveillance Capitalism: A Reflection on Census 2019
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The just concluded census 2019 brought with it many strange occurrences including the official classification of my good friend Rasna Warah as a Mtaita, a community to which she is only very remotely connected by virtue of being married to a husband whose mother is a Mtaveta. The Taita and Taveta, who give their home county Taita-Taveta its name, are two related but distinct ethnic groups. Rasna’s ethnicity is unambiguous, she is a Kenyan Asian, which should be one of the ethnicities available on the census questionnaire.

In standard statistical practice, people’s racial and ethnic identity are self-declared and the identity questions usually have options such as “other” and “mixed” as well as the choice not to disclose. But Rasna was not given a choice, as she recounts here. While this may seem like a trivial matter, the undercurrents of racism and patriarchy in this action are disturbing. It is, I think, even more alarming that the enumerators, given a little authority, felt that they had the power to exercise discretion on the matter.

Past censuses have been rather uneventful statistical exercises. This one had the aura of a security operation. In the run-up, we were treated to all manner of threats and arbitrary orders from the Internal Security Cabinet Secretary, the Jubilee administration’s energetic and increasingly facile enforcer. On the eve of the census, the government spokesman added to the melodrama by issuing a statement informing the public that census enumerators would be asking for personal identification details, including national ID and passport numbers and, ominously, huduma namba registration status. There are few issues as controversial right now as huduma namba and to introduce that question was a sure way of heightening suspicion and undermining the credibility of the census.

More fundamentally, anonymity is a canon of statistical survey work. In fact, the law prohibits dissemination of any information which can be identified with a particular respondent without the respondent’s consent. For this reason, censuses and statistical surveys are usually designed and the data maintained in such a way as to ensure that the respondents remain anonymous.

In October last year, the Government gazetted the census regulations that include a schedule of the information that would be collected. Identity information is not listed in the schedule. In January this year, the Keya National Bureau of Statistics (KNBS) issued a media briefing, still on their website, that also listed the information that would be collected. It too does not mention identity information. That it was the Government spokesman—and not the KNBS—who appraised the public, and only on the eve of the census, is telling.

The response to the protestations that met the disclosure was vintage Jubilee—dishonest and inept. The spokesman explained that the personal identity information would be removed to restore the anonymity of the data. If indeed the purpose was to establish registration coverage, the professional statisticians would have asked respondents to state their registration status. Moreover, for planning purposes, professional statisticians would have designed a comprehensive module that would have included other critical information such as birth registration status.

The draconian zeal with which huduma namba is being pursued—including the proposed legislation—is all the more perplexing because, since all the functions listed are those that are currently served by the national ID, the sensible thing to do would be to upgrade the national ID. Seeing as we have already had three national ID upgrades since independence, it seems to me unlikely that a fourth upgrade would have generated the heat that the huduma namba has.

In The Spirit of the Laws, Montesquieu classified political systems into three categories, namely republican, monarchical and despotic. He defined a republican system as characterised by citizenship rights. A republican system is democratic if political equality is universal, and aristocratic if the rights are a privilege that is denied to some members (e.g. slaves). In monarchical systems, the rulers have absolute authority governed by established rules. In a despotic system, the ruler is the law.

Montesquieu postulated for each system a driving principle, ethos if you like, on which its survival depends. The driving principle of a democratic republic is love of virtue— a willingness to put the public good ahead of private interests. He opined that a republican government failed to take root in England after the Civil War (1642-1651) because English society lacked the required principle, namely the love of virtue. The short-lived English republic, known as the Commonwealth of England, lasted a decade, from the beheading of Charles I in 1649 to shortly after the death Oliver Cromwell in 1659. The driving principle of monarchical systems is love of honour and the quest for higher social rank and privilege. For despotism it is fear of the ruler. The rulers are the law, and they rule by fear.

In The Spirit of the Laws, Montesquieu classified political systems into three categories, namely republican, monarchical and despotic. He defined a republican system as characterised by citizenship rights.

Identity documents are a key element of the apparatus of despotism. Our own identity card has its origins in the colonial kipande (passbook). As Juliet Atellah narrates in Toa Kitambulisho! Evolution of Registration of Persons in Kenya,

“The Kipande was worn around the neck like a dog collar. The Kipande contained the wearer’s tribe, their strengths and weaknesses and comments from his employer on his competence, therefore, determining his pay or whether or not he would be employed. The government used the Kipande to curtail freedom of Africans and monitor labour supply. It also empowered the police to stop a native anywhere and demand to be shown the document. For Africans, the Kipande was like a badge of slavery and sparked bitter protests.”

In essence, the kipande was a surveillance tool for an indentured labour system which enabled the settler economy to suppress wages. But it was not perfect. Keren Weitzberg, a migration scholar and author of We Do Not Have Borders: Greater Somalia and the Predicaments of Belonging in Kenya, makes an interesting and insightful contextual link between huduma namba and the colonial quest to better the kipande revealed in a recommendation that appears in a 1956 government document:

“Consideration should be given to the provision of a comprehensive document for Africans, as is done in the Union of South Africa and the Belgian Congo. This should incorporate Registration particulars, payment of Poll Tax, and such other papers as the African is required to carry or are envisaged for him, e.g. Domestic Service record and permit to reside in urban areas. Eligibility under the Coutts proposals for voting might also be included in the document. The document would then become of value to the holder and there would be less likelihood of its becoming lost or transferred, as is the case with the present Identity document.” 

The purpose of the huduma namba is the same as that of the “comprehensive document for Africans”—to instill in people the sense that Big Brother is watching. But despotism is not an end in itself. The raison d’être of the colonial enterprise was economic exploitation. This has not changed.

The 2001 Nobel Prize for Economics was shared by George Akerlof, Michael Spence and Joseph Stiglitz for their analysis of markets with asymmetric information. A market with asymmetric information is one where material attributes of a good or service are private information known only to the seller and not observable by the buyer; the seller has an incentive to conceal the attributes. In essence, it is a market where the buyer cannot be sure that they will get what they pay for. Asymmetric information problems are pervasive in labour and credit markets.

Identity documents are a key element of the apparatus of despotism. Our own identity card has its origins in the colonial kipande (passbook). As Juliet Atellah narrates in Toa Kitambulisho! Evolution of Registration of Persons in Kenya

A potential employer cannot tell in advance whether a worker is a performer or not, or even whether he or she is dishonest—they only get to know that after hiring the worker, and at considerable cost if they get it wrong. We know that job seekers go out of their way to misrepresent themselves, including faking qualifications and references, and concealing adverse information such as previous dismissals and criminal records. To mitigate the problem, employers go out of their way to obtain and check out references including certificates of good conduct from the police.

The original kipande, as Atellah notes, included information on the bearers “strengths and weaknesses and comments from his employer on his competence.” It does not require too much imagination to see how errant natives would have made for a severe labour market information asymmetry problem, motivating the settler economy to invent this seemingly innocuous but probably effective labour market information system.

Similarly, a potential borrower’s creditworthiness is not observable to lenders. Lenders only get to sort out good and bad borrowers from experience. A customer’s credit history is a lender’s most valuable asset. A public credit reference system, such as the Credit Reference Bureaus, is a device for mitigating credit market information asymmetry. The parallel with the kipande character reference is readily apparent.

In essence, the kipande was a surveillance tool for an indentured labour system which enabled the settler economy to suppress wages.

As a credit information system, the digital panopticon envisaged by huduma namba is priceless, and as one of the country’s leading mobile lenders, the Kenyatta family-owned Commercial Bank of Africa (CBA) is the primary beneficiary. Indeed, well before the public was informed about it, huduma namba featured prominently in a CBA-led mobile lending platform project called Wezeshafeatured in this column—that was subsequently rebranded and launched as Stawi.

Nine years ago this week, we promulgated a new constitution. Since its enactment the political and bureaucratic establishment has spared no effort to restore the unfettered discretion and apparatus of rule by fear that the new constitutional dispensation is meant to dismantle. Early in its term, the Jubilee administration sought to pass a raft of security-related legislation that would have clawed back most of the civil liberties enshrined in the Bill of Rights. Uhuru Kenyatta is on record, in one of the pre-election TV interviews, attributing his underwhelming performance to the constraints on his authority by the 2010 Constitution. He went on to express nostalgia for the old one.

In the creeping securocratisation of every sphere of the State, the incessant threats and arbitrary orders, the renewed quest for that elusive all-encompassing kipande, and even the arbitrary assignment of identity on citizens, Montesquieu would see a marked deficiency of love for virtue, the requisite principle for a democratic republic.

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Africa and Palestine: A Noble Legacy That Must Never Be Forgotten

4 min read. Today’s generation of African leaders should not deviate from that the solidarity between Africa and Palestine. Indeed, writes RAMZY BAROUD If they betray it, they betray themselves, along with the righteous struggles of their own peoples.

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Africa and Palestine: A Noble Legacy That Must Never Be Forgotten
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Europe’s “Scramble for Africa” began in earnest in 1881 but never ended. The attempt at dominating the continent using old and new strategies continues to define the Western relationship with this rich continent. This reality was very apparent when I arrived in Nairobi on June 23. Although I had come to address various Kenyan audiences at universities, public forums and the media, I had also to learn. Kenya, like the rest of Africa, is a source of inspiration for all anti-colonial liberation movements around the world. We Palestinians can learn a great deal from the Kenyan struggle.

Although African countries have fought valiant battles for their freedom against their Western colonisers, neocolonialism now defines the relationship between many independent African countries and their former occupiers. Political meddling, economic control and, at times, military interventions – as in the recent cases of Libya and Mali – point to the unfortunate reality that Africa remains, in myriad ways, hostage to Western priorities, interests and dictates.

In the infamous Berlin Conference of 1884, Western colonial regimes attempted to mediate between the various powers that were competing over Africa’s riches. It apportioned to each a share of the African continent, as if Africa were the property of the West and its white colonists. Millions of Africans died in that protracted, bloody episode unleashed by the West, which shamelessly promoted its genocidal oppression as a civilisational project.

Like most colonised peoples in the southern hemisphere, Africans fought disproportionate battles to gain their precious freedom. Here in Kenya, which became an official British colony in the 1920s, Kenya’s freedom fighters rose in rebellion against the brutality of their oppressors. Most notable among the various resistance campaigns, the Mau Mau rebellion of the 1950s remains a stark example of the courage of Kenyans and the cruelty of colonial Britain. Thousands of people were killed, wounded, disappeared or were imprisoned under the harshest of conditions.

Palestine fell under British occupation, the so-called British Mandate, around the same period that Kenya also became a British colony. Palestinians, too, fought and fell in their thousands as they employed various methods of collective resistance, including the legendary strike and rebellion of 1936. The same British killing machine that operated in Palestine and Kenya around that time, also operated, with the same degree of senseless violence, against numerous other nations around the world.

While Palestine was handed over to the Zionist movement to establish the state of Israel in May 1948, Kenya achieved its independence in December 1963.

At one of my recent talks in Nairobi, I was asked by a young participant about “Palestinian terrorism”. I told her that Palestinian fighters of today are Kenya’s Mau Mau rebels of yesteryear. That if we allow Western and Israeli propaganda to define Paestine’s national liberation discourse, then we condemn all national liberation movements throughout the southern hemisphere, including Kenya’s own freedom fighters.

We Palestinians must however shoulder part of the blame that our narrative as an oppressed, colonised and resisting nation is now misunderstood in parts of Africa.

When the Palestine Liberation Organisation committed its historical blunder by signing off Palestinian rights in Oslo in 1993, it abandoned a decades-long Palestinian discourse of resistance and liberation. Instead, it subscribed to a whole new discourse, riddled with carefully-worded language sanctioned by Washington and its European allies. Whenever Palestinians dared to deviate from their assigned role, the West would decree that they must return to the negotiating table, as the latter became a metaphor of obedience and submission.

Throughout these years, Palestinians mostly abandoned their far more meaningful alliances in Africa. Instead, they endlessly appealed to the goodwill of the West, hoping that the very colonial powers that have primarily created, sustained and armed Israel, would miraculously become more balanced and humane.

When the Palestine Liberation Organisation committed its historical blunder by signing off Palestinian rights in Oslo in 1993, it abandoned a decades-long Palestinian discourse of resistance and liberation.

However, Washington, London, Paris, Berlin, etc., remained committed to Israel and, despite occasional polite criticism of the Israeli government, continued to channel their weapons, warplanes and submarines to every Israeli government that has ruled over Palestinians for the last seven decades. Alas, while Palestinians were learning their painful lesson, betrayed repeatedly by those who had vowed to respect democracy and human rights, many African nations began seeing in Israel a possible ally. Kenya is, sadly, one of those countries.

Understanding the significance of Africa in terms of its economic and political potential, and its support for Israel at the UN General Assembly, right-wing Israeli Prime Minister Benjamin Netanyahu has launched his own “Scramble for Africa”. Netanyahu’s diplomatic conquests on the continent have been celebrated by Israeli media as “historic”, while the Palestinian leadership remains oblivious to the rapidly changing political landscape.

Kenya is one of Israel’s success stories. In November 2017, Netanyahu attended the inauguration of President Uhuru Kenyatta. Netanyahu was seen embracing Kenyatta as a dear friend and ally even as Kenyans rose in rebellion against their corrupt ruling classes. Tel Aviv had hoped that the first-ever Israel-Africa summit in Togo would usher in a complete paradigm shift in Israeli-African relations. However, the October 2017 conference never took place due to pressure by various African countries, including South Africa. There is still enough support for Palestine on the continent to defeat the Israeli stratagem. But that could change soon in favour of Israel if Palestinians and their allies do not wake up to the alarming reality.

The Palestinian leadership, intellectuals, artists and civil society ambassadors must shift their attention back to the southern hemisphere, to Africa in particular, rediscovering the untapped wealth of true, unconditional human solidarity offered by the peoples of this ever-generous continent.

Kenya is one of Israel’s success stories. In November 2017, Netanyahu attended the inauguration of President Uhuru Kenyatta. Netanyahu was seen embracing Kenyatta as a dear friend and ally even as Kenyans rose in rebellion against their corrupt ruling classes

The legendary Tanzanian freedom fighter, Mwalimu Julius Nyerere, who is also celebrated in Kenya, knew very well where his solidarity lay. “We have never hesitated in our support for the right of the people of Palestine to have their own land,” he once said, a sentiment that was repeated by the iconic South African leader Nelson Mandela, and by many other African liberation leaders. Today’s generation of African leaders should not deviate from that noble legacy. If they betray it, they betray themselves, along with the righteous struggles of their own peoples.

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