Connect with us


In Praise of Idleness: Further Reflections on Knowledge, Capital and Growth

9 min read.

Why is society, even those countries in which more capital could not possibly appreciably improve standards of living, still obsessed with hard work, thrift and accumulation of capital? Why are Africa’s leaders forever trooping to the West and East, fawning, groveling and whoring for capital? By DAVID NDII



In Praise of Idleness: Further Reflections on Knowledge, Capital and Growth
Photo: Shutterstock
Download PDFPrint Article

“Modern technic has made it possible to diminish enormously the amount of labor necessary to produce the necessaries of life for every one. Let us take an illustration. Suppose that at a given moment a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins as before. But the world does not need twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world everybody concerned in the manufacture of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?”

Bertrand Russell In Praise of Idleness


In economics, we are concerned primarily with three things, productivity, efficiency and welfare. Productivity is simply output per unit of input. We measure productivity in terms of output per worker. Economic efficiency is a question of optimality, that is, whether the resources have been put to the best possible use. Economics is in fact known as the study of resource allocation. Welfare is a question of whether the way production and distribution are organized is good for society. We can summarize the three questions: are we good at it, are we doing it right, and what good does it do. In short, it boils down to purpose. What is it all in aid of? This is Russell’s beef with the industrious society. To what end?

In economics, we are concerned primarily with three things, productivity, efficiency and welfare.

Ms Agronomy and Mr. Capital are two young farmers. Both have inherited fifty acres of land on which their parents practice traditional farming, growing maize, beans, yams and livestock. Mr. Capital is an ambitious guy. He studied finance. He wants to modernize and mechanize.   Business plan, bank loan, buys tractors, harrows and ploughs and puts the whole 50 acres under maize. He is able to double his yield to 20 bags an acre. Next year he leases another 50 acres. Soon he is farming 500 acres. He has a fleet of tractors, sprayers, irrigation system, a combine harvester grain driers, silo—the works. He is producing 30 bags per acre.

Ms Agronomy went to agricultural college. She has small plots set aside on her farm where she experiments with different agronomic techniques such as zero-till farming, crop rotation, inter-cropping, organic farming, mulching and so on. She is still farming her fifty acres. For ease of analysis we translate all her different products into “maize equivalent.” Her production also works out to the equivalent of 30 bags of maize per acre.

Ms Agronomy and Mr. Capital’s economic accounts are summarized in the table below. Although both obtain the same yield, 30 bags per acre, Mr. Capital’s operation is evidently much more productive. Its total output translates to 750 bags per worker, two and a half times more than Ms Agronomy’s 300 bags per worker. It is not difficult to see how this difference has come about. Mr. Capital’s workers have more tools to work with, Sh. 3 million per worker against Ms Agronomy’s Sh. 600,000 per worker—five times as much. They are also working more land, 25 acres worker compared to 10 acres per worker in Ms Agronomy’s operation, obviously because they are mechanized.

But capital is not free. In economics we think of the cost of capital in terms of depreciation, wear and tear if you like, which is the rate of its consumption. Because Mr. Capital has all manner of equipment that need spare parts and replacement that Ms Agronomy does not have, his consumption of capital will be higher. Let us put it at 20 percent and Ms Agronomy’s at 15 percent. This translates to a capital costs of KSh. 600,000 and Sh. 90,000 per worker respectively.

To complete the accounts, we need cost of land and other inputs (fertilizers, diesel, electricity etc) which we call intermediate inputs in economic accounting jargon. The land rent is assumed at 500 per acre, Ms Agronomy has 10 acres per worker and Mr. Capital has 25, which works out to Sh. 6,000 and 24,000 per worker respectively. For intermediate inputs Mr. Capital uses more inputs including diesel, electricity fertilizer pesticides and so on. We assume that his input costs work out to Sh.80 per bag and Ms Agronomy’s are half as much, which adds up to Sh. 37,500 and Sh.6,000 per worker respectively. The price of maize is Sh. 1000 a bag.

What more do they tell us?

Although Mr. Capital’s operation has higher output per worker, Miss Agronomy’s operation has a labour surplus of Sh.196,500 against Mr. Capital’s Sh. 88,500 per worker, that is Sh.108,500 more. The labour surplus is what is available for consumption. If Miss Agronomy were to farm Mr. Capital’s land, she would create 50 jobs, two and half times more than Mr. Capital, and generate afford the society Sh. 5.4 million more consumption. With the same financing her operation would employ five times more workers (100 compared to 20) and six times the labour surplus (Sh.10.8 million compared to Sh.1.77 million) OF Mr. Capital’s operation, but it would require twice as much land—and that would be a problem wouldn’t it. As this columnist has remonstrated for the better part of three decades, if society entrusts landlords with the allocation of its resources, it ought not be befuddled that they seek to maximize rents

Mr. Capital’s workers produce Sh. 450,000 more, but the capital stock consumes more than the additional output. In economics we say that Mr. Capital’s operation has over-accumulated capital or if you want to be esoteric, it is “dynamically inefficient.” The idea that economy can over-accumulate capital runs counter to conventional wisdom, which maintains that consumption is bad, and investment is good. A particularly irksome variant of this conventional wisdom maintains that the more government spends on “development” by which we mean brick and mortar stuff, and the less is spends on recurrent, especially the wage bill, the better.

Suppose an economy starts out with a GDP per capita of $1000 and no physical capital stock. You can think of this as a pastoralist economy where the GDP is simply the value of each pastoralist’s annual off-take— for example, that each family sells four steers per person at $250 each. GDP is also equal to consumption.

Now, this economy decides to develop by “adding value” —feedlots, abattoirs, meat processing plants the works. It also needs infrastructure— electricity for the cold rooms, water etc. To finance this, it needs to save and invest. The table shows how the economy would evolve under four different investment rates 10, 20, 30 and 40 percent, and the associated economic growth rate, output (GDP per capita), the capital stock (obtained by depreciating investment at 20 percent per year), and consumption per person. At a 10 percent investment rate, GDP per person grows by one percent per year.

Ten years on, the GDP is just about 10 percent higher – the economy has accumulated $460 of capital stock per person – but people are still consuming $6 less than before development started. The elderly who die during this period would have been better off without development. They will have to be satisfied with bequeathing their children a better future—hopefully. At an investment rate of 20 percent, the economy would be breaking even after ten years, with consumption $75 higher than in year zero. Thirty percent investment rate consumption rises by another $12. But at 40 percent investment, the per capita consumption in year ten is $62 less than at an investment rate of 30 percent. What’s driving this?

[An] economy decides to develop by “adding value”…At a 10 percent investment rate, GDP per person grows by one percent per year. Ten years on, the GDP is just about 10 percent higher…but people are still consuming $6 less than before development started. But at 40 percent investment, the per capita consumption in year ten is $62 less than at an investment rate of 30 percent. The elderly who die during this period would have been better off without development…What’s driving this?

Mathematically, it is the relationship between the investment rate and the growth rate. A 10 percent investment rate increases growth by 1 percent. From 10 to 20 percent it increases by two percentage points. The increase declines to 1.5 percentage points between 20 percent and 30 percent, and to one percentage point between 30 and 40 percent investment rate. This is not a sleight of hand. It reflects two things. First the returns to capital decreases with the amount of capital—the law of diminishing returns. Secondly the more capital an economy accumulates the more resources are consumed by maintaining and replacing it. In the 40 percent investment scenario the replacement cost of capital amounts to a good 30 percent of GDP— three quarters of the 40 percent investment rate is simply maintaining the level of capital stock.

This economy has violated the Golden Rule saving rate. The Golden Rule saving rate is the rate of capital accumulation required to maintain a stable rate of consumption growth. It is called the golden rule because it requires each generation to do what it would have other generations do. Save too little, the capital stock declines and the next generation’s consumption will fall. Saving too much deprives the current generation only to burden future ones with maintaining a bigger capital stock than they need. The Golden Rule saving rate for this economy is somewhere between 30 and 40 percent. The economy ought to shed some capital. The question is, what will it shut down? No capitalist will volunteer to close down their plant for the good of the country. Since none will, recessions come every so often and sorts them out.

It should also be evident that capital on its own cannot deliver the kind of growth in prosperity that we observe in reality. I gather that my smartphone has millions of times more computing power than the Apollo Guidance Computer (AGC) aboard the spacecraft that took Man to the moon. The AGC was the first computer to use integrated circuits (ICs), the now ubiquitous microchips. It cost $150,000 (about US$ 1.1 million in today’s value). My smartphone cost $1000 dollars and you can get a good one for a quarter of that. One very big difference is that the AGC was crash-proof. That aside, fifty years down the road, the cost of AGC will buy you 5,000 infinitely more powerful handheld computers to do the most frivolous things.

Capital on its own cannot deliver the kind of growth in prosperity that we observe in reality.

It is science, not capital that enables us to waste computing power on selfies and fake news. The reason we can afford to consume knowledge, frivolously or otherwise, is first, not subject to diminishing returns. Secondly, knowledge can be used by many people over and over again at no additional cost.

Suppose Ms Agronomy were to acquire another 50 acres of land. She would with very little capital, simply replicate her knowhow and be producing at peak output in no time. And of course, Ms Agronomy would be continuing with her experiments. So by this time, she would be up to 35 bags per acre, or 40. In fact, every one of Ms Agronomy’s workers could go off and replicate her methods at no extra cost. Mr. Capital’s workers cannot walk into the bank and walk out with a tractor. Mr. Capital would be back to the bankers who would in turn deploy more of society’s savings to equip his operation. More of societies savings would have to be mobilized. New equipment would need to be manufactured. Producing more equipment needs more workers. So instead of producing food, Ms Agronomy’s workers will now be hired to produce the equipment to produce food.

It is science, not capital that enables us to waste computing power on selfies and fake news. The reason we can afford to consume knowledge, frivolously or otherwise, is first, not subject to diminishing returns.

Why then is society, even those countries in which more capital could not possibly appreciably improve standards of living —think Japan— still obsessed with hard work, thrift and accumulation of capital?

Why are Africa’s leaders forever trooping to the West and East, fawning, groveling and whoring for capital?

Bertrand Russell: ‘From the beginning of civilization until the industrial revolution a man could, as a rule, produce by hard work little more than was required for the subsistence of himself and his family, although his wife worked at least as hard and his children added their labour as soon as they were old enough to do so. The small surplus above bare necessaries was not left to those who produced it, but was appropriated by priests and warriors. In times of famine there was no surplus; the warriors and priests, however, still secured as much as at other times, with the result that many of the workers died of hunger. At first sheer force compelled them to produce and part with the surplus. Gradually, however, it was found possible to induce many of them to accept an ethic according to which it was their duty to work hard, although part of their work went to support others in idleness. [But] a system which lasted so long and ended so recently has naturally left a profound impression upon mens thoughts and opinions. Much that we take for granted about the desirability of work is derived from this system and, being pre-industrial, is not adapted to the modern world.

Says Bertrand Russell: “Gradually, however, it was found possible to induce many of them to accept an ethic according to which it was their duty to work hard, although part of their work went to support others in idleness.”

Warriors, priests, chiefs, bureaucrats. And bankers.

David Ndii

David Ndii is a leading Kenyan economist and public intellectual.

Continue Reading


Seeds of Neo-Colonialism: Why GMO’s Create African Dependency on Global Markets

Rather than addressing food scarcity, genetically modified crops may render African farmers and scientists more, not less, reliant on global markets.



Seeds of Neo-Colonialism: Why GMO’s Create African Dependency on Global Markets
Download PDFPrint Article

As COVID-19 continues to lay bare the deficiencies in the global food system, imagining new food futures is more urgent than ever. Recently, some have suggested that seeds that are genetically modified to include pest, drought, and herbicide resistance (GMOs) provide an avenue for African countries to become more self-sufficient in food production and less reliant on global food chains. Although we share the desire to build more just food systems, if history is any indicator, genetically-modified (GM) crops may actually render African farmers and scientists more, not less, reliant on global actors and markets.

In a paper we recently published in African Affairs, we trace a nearly 30-year history of collaborations among the agribusiness industry, US government agencies, philanthropic organizations, and African research councils to develop GMOs for African farmers. We found that these alliances, though impressive in scope, have so far resulted in few GMOs reaching African farmers and markets. Why, we ask, have efforts to bring GMOs to Africa yielded so little?

One reason, of course, is organized activism. Widespread distrust of the technology and its developers has animated local and transnational social movements that have raised important questions about the ownership, control, and safety of GM crops. But another issue has to do with the complex character of the public-private partnerships (PPPs) that donors have created to develop GM crops for the continent. Since 1991, beginning with an early partnership between the US Agency for International Development (USAID), the Kenyan Agricultural Research Institute, and Monsanto to develop a virus resistant sweet potato (which never materialized), PPPs have become a hallmark of GMO efforts in Africa. This is mainly so for two reasons. The first is that GM technology is largely owned and patented by a handful of multinational corporations, and, thus, is inaccessible to African scientists and small to mid-sized African seed companies without a partnership agreement. The second is that both donors and agricultural biotechnology companies believe that partnering with African scientists will help quell public distrust of their involvement and instead create a public image of goodwill and collaboration. However, we found that this multiplicity of partners has created significant roadblocks to integrating GMOs into farming on the continent.

Take the case of Ghana. In the mid-2000s, country officials embarked on an impressive mission to become a regional leader in biotechnology. While Burkina Faso had been growing genetically modified cotton for years, Ghana sought to be the first West African country to produce GM food crops. In 2013, Ghanaian regulators thus approved field trials of six GM crops, including sweet potato, rice, cowpea, and cotton, to take place within the country’s scientific institutes.

However, what began as an exciting undertaking quickly ran into the trouble. Funding for the sweet potato project was exhausted soon after it began. Meanwhile, cotton research was put on indefinite hold in 2016 after Monsanto, which had been supplying both funding and the Bt cotton seed, withdrew from its partnership with the Ghanaian state scientific council. Describing its decision, a Monsanto official said that without an intellectual property rights law in place—a law that has been debated in Ghanaian parliament and opposed by Ghanaian activists since 2013—the firm could not see the “light at the end of the tunnel.”

Monsanto was also embroiled in legal matters in Burkina Faso, where their Bt cotton had unexpectedly begun producing inferior lint quality. Meanwhile, Ghanaian researchers working on two varieties of GM rice had their funding reduced by USAID, the main project donor. This left them with insufficient resources, forcing the team to suspend one of the projects. The deferment of both the cotton and one of the rice projects dealt a blow to the Ghanaian scientists who were just a year or two away from finalizing their research.

In many ways, the difficulties presented here from both Ghana and Burkina Faso suggest that efforts to bring agricultural biotechnology to Africa are a house of cards: the partnerships that seem sturdy and impressive from the outside, including collaborations between some of the world’s largest philanthropies and industry actors, are actually highly unstable. But what about the situation in other countries?

Both Nigeria and Kenya have made headlines recently for their approval of GM crops. The news out of Nigeria is especially impressive, where officials recently approved a flurry of GMO applications, including Bt cotton and Bt cowpea, beating Ghana to permit the first genetically modified food crop in West Africa. Kenya also approved the commercial production of Bt cotton, an impressive feat considering the country has technically banned GMOs since 2011. Both countries, which have turned to an India-based Monsanto subsidiary for their GM seed supply, hope that Bt cotton will help revitalize their struggling cotton sectors. While biotech proponents have applauded Nigeria and Kenya for their efforts, it will take several growing seasons and more empirical research to know how these technologies will perform.

As the cases described here demonstrate, moving GMOs from pipeline to field is not simply a matter of goodwill or scientific discovery; rather, it depends on a multitude of factors, including donor support, industry partnerships, research outcomes, policy change, and societal acceptance. This complex choreography, we argue, is embedded in the DNA of most biotechnology projects in Africa, and is often ignored by proponents of the technology who tend to offer linear narratives about biotech’s potential to bolster yields and protection against pests and disease. As such, we suggest the need to exercise caution; not because we wish to see the technology fail, but rather because we are apprehensive about multi-million dollar collaborations that seemingly favor the concerns of donors and industry over those of African scientists and farmers.

The notion of public-private partnerships may sound good, but they cannot dispel the underlying interests of participating parties or the history and collective memory of previous efforts to “improve” African agriculture.

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

Continue Reading


The Chira of Christopher Msando Will Haunt His Murderers Until Justice for His Family Is Served

Those who contributed in any way to the abduction, torture and assassination of Christopher Msando will eventually face justice because if there is something that history has confirmed to us time and again, it is that justice is always served, no matter how long it takes.



The Chira of Christopher Msando Will Haunt His Murderers Until Justice for His Family Is Served
Download PDFPrint Article

Lately, I have been thinking a lot about chira. In Luo language and culture, the closest translation of chira is “curse”. It results from an infraction of the kwer (taboos) and can befall an individual, a clan, a community or even a nation. In some cases, ritual cleansing can take away the chira. However, the chira arising from killing a person cannot be removed through rituals. It remains with you, your clan and your community. I am convinced that a chira from the kidnap, torture and brutal assassination of Christopher Msando haunts Kenya to date. The dire state of the economy, socio-economic inequalities, political polarisation, corruption, and state capture, all seem to have gotten worse in the last three years.

To refresh our memories, Christopher Msando was the Information Communications Technology (ICT) manager at the Independent Electoral and Boundaries Commission (IEBC). Msando oversaw key ICT processes, including the audit of the register of voters and the data centre project. Crucially, he was the project manager for the electronic transmission of results for the 2017 presidential elections. Msando was one of the few Africans who had access to the highly sensitive results transmission system set up by the French company Safran/OT Morpho (now renamed IDEMIA). Safran had been single-sourced by the IEBC to deliver the Kenya Integrated Election Management System (KIEMS), in a contract worth close to Sh6b. The deal was so scandalous that even the state-captured Kenya National Assembly’s Parliamentary Accounts Committee on 24 April 2019 banned Safran/OT Morpho/IDEMIA from operating in Kenya for ten years.

Msando had been unanimously nominated by the Wafula Chebukati-led Commission to lead key ICT processes. He was hard working, had superb technical skills, a strong team spirit and excellent communication skills. Msando was an honest man, who at times seemed quite naïve in the trust he placed in his bosses to do the right thing. He was transparent in sharing the loopholes in the ICT system and revealed how some “external” actors had already gained access to it, months before the August 2017 election. He explained complex processes to the Commissioners in layman’s language, without making them feel insecure due to their lack of ICT knowledge. This is probably the singular reason the Commission chose him over his then boss, James Muhati, to be responsible for the ICT operations for the 2017 election. Unlike Muhati, Msando did not show the Commissioners disdain for their ignorance or incompetence.

One of the few defiant actions taken by the Chebukati Commission was to suspend Muhati in May 2017, allegedly for failing to cooperate with an internal audit. But as press reports indicated at the time, there was more to the story than the Commission revealed. The suspension took Muhati’s close friend, then Chief Executive Officer, Ezra Chiloba, by surprise. Chiloba made several attempts to block the suspension from being executed, prompting a reprimand from the Commissioners. Msando was unanimously appointed the officer-in-charge of the ICT directorate.

Within a month of being in charge of the ICT directorate, Msando finalised the register of voters, secured a new data centre, developed the workflow for the electronic transmission of presidential results and sealed some technical loopholes in the KIEMS gadgets that would have enabled “dead voters” to vote. It is probably these measures that he had put in place that gave Msando the confidence to say to John-Allan Namu in an interview in June 2017 that “no dead voters will rise under my watch”. And indeed, with his assassination, potentially, many “dead voters” voted.

Reports indicate that the intention of the Commission had been to keep Muhati suspended until the end of the 2017 elections. However, former Commission staff say that Chebukati received a “dossier” from the Jubilee Secretary-General, Raphael Tuju, falsely claiming that Msando was working for the opposition coalition, NASA. Incidentally, death threats against Msando intensified during this period. He spoke openly about them, showed friends and colleagues the chilling text messages, and with his typical hearty laughter, brushed them off as he went on with his work almost unperturbed. Despite making official reports, no measures were taken to address his concerns. Msando was not even provided with a Commission vehicle and security, which he was entitled to by dint of his functions.

In the meantime, the pressure to reinstate Muhati intensified. There are reports that Deputy President William Ruto and his wife Rachel Ruto called almost all the Commissioners to demand the reinstatement of Muhati, who is a close friend from their University days. Those who did not get a direct call from the Deputy President or his wife, had the message delivered by his Chief of Staff, Ambassador Ken Osinde. Despite protests from two of the Commissioners, Muhati quietly returned from his suspension on 1 June 2017, and from then on, Msando’s days on earth were numbered.

The reports of Msando’s disappearance on 29 July shocked but did not surprise many at the Commission. The threats had been there for many months including on the lives of Chebukati and former Commissioner Roselyn Akombe. One would say that the manner in which these threats were handled by the Commission made the environment conducive for Msando to be assassinated. The silence emboldened his assassins to go ahead with their plan. For their silence, the chira from Msando’s murder will forever remain with Chebukati, Akombe and the other Commissioners.

On that fateful day on 29 July 2017, it is alleged that Chiloba and Muhati asked Msando not to go home after his KTN interview at 7 pm. It is reported that Msando and a friend decided to have drinks at a joint near the Commission’s Anniversary Towers office, as they waited for further instructions from Chiloba and Muhati. Details of what exactly happened to Msando from that Friday night until his bruised body was identified at the City Mortuary on 31 July 2017 will eventually come out. It is clear that there are many colleagues of Msando’s who have more information than they have revealed in public. To many them, chira for their silence will forever hang over them.

But of course, the harshest chira is reserved for those who ordered, aided and executed Msando’s abduction, torture and assassination. If there is something that history has confirmed to us on many occasions, it is that justice is always served, no matter how long it takes. Just this year, we have seen the fugitive Félicien Kabuga, an alleged leader and financier of the 1994 Rwandan genocide arrested. Monuments in honour of those who perpetuated grave injustices including racism, slavery and colonialism for more than 400 years have been brought down in the United States and Europe. And just last month in Germany, 94-year-old Reinhold Hanning was convicted of being “an accessory” to the murder of thousands of Jews while he worked as a guard at the Auschwitz Death Camp. It took 77 years to convict him for crimes he committed at the age of 17, but justice was eventually served.

It does not matter how long it will take, justice for Chris Msando will be served. Msando’s children Allan, Alvin, Alama and Alison deserve to know why their daddy was murdered. His widow Eva has several unanswered questions. Mama Maria needs to know why her last-born son could not have been jailed if he had done something wrong, rather than wake up every morning to his grave in Lifunga. Msando’s siblings deserve closure. But three years on, the investigators have no answers to offer nor have they shown any interest in the case. Politicians like Moses Kuria, Kimani Ngunjiri and Oscar Sudi continue to recklessly play politics with such a painful issue. But Msando’s friends are quietly pursuing the leads. Quietly documenting the facts. For, eventually, Kenya will have to reckon with its history of political assassinations.

In the meantime, over to juok, to continue raining chira on those who contributed in any way to the abduction, torture and assassination of Msando.

Continue Reading


Quest for a More Equitable Nation Undermined: CRA’s Mission Aborted

In 2010 Kenya adopted a constitution that promised to address the daunting problem of ethno-regional economic discrimination. The Commission for Revenue Allocation was created to safeguard this intention and put an end to the exclusion of many ethnic communities in Kenya, a legacy of colonial rule and a decades-long centralised, ethicised, and personalised presidential system.



Quest for a More Equitable Nation Undermined: CRA’s Mission Aborted
Download PDFPrint Article

The current contentious debate in the Senate on the horizontal revenue allocation formula between counties, reveals a lack of political goodwill to end legal, systemic and institutionalised marginalisation in Kenya. The fact is that this formula does not exist or emerge in a vacuum, but is rooted in the political machinations and ideologies of those who control the dominant knowledge system that has informed economic policies responsible for sustaining regional privilege.

The proposals on the new revenue sharing formula are a clear sign that although regional discrimination might have been legally terminated, structural, social and systemic discrimination still thrives in Kenya. This is because the dominant philosophy of public policy continues to mirror the same exclusivity and discrimination that were legally institutionalised by Sessional Paper No. 10 of April 1965 authored by Tom Mboya and a cabal of bureaucrats at the post-independence national treasury and planning ministry.

Kenyans must be reminded that the idea of the Commission on Revenue Allocation (CRA) as an independent Commission emerged in response to the (traditionally) skewed allocation of revenue in Kenya. The constitution provides for Commissions and Independent Offices as an avenue to better cushion Kenya’s national interest against transient executive policy choices. Until the enactment of the 2010 constitution, all revenue allocations were centralised under the national government. Because of the pervasive absence of a culture of nationhood in Kenya and the extent of fragmentation in the society, most distribution of national resources has been based on ethnic, regional or political interests.

The exclusion of many ethnic communities in Kenya is the legacy of colonial rule and a decades-long centralised, ethicised, and personalised presidential system. Concerned by the entrenched economic inequalities, the constitution devised the counties to disburse a minimum of 15 per cent of the nationally generated fiscal revenue to the 47 subnational units. Additionally, it sought to ensure that equity was the overriding consideration in sharing revenue among the 47 counties.

The CRA was created to safeguard this intention and mandated to develop a sharing formula every five years. In conceptualising its mandate, the CRA must thus bear in mind this twisted legacy of our economic history and adopt a holistic and not just a positivist approach. Such an approach will integrate an appreciation of historically skewed allocations in favour of some regions the net effect of which has been to render these regions more attractive to diverse economic activities. Factoring in an amortised perspective of an investment in roads in 1960 would provide clarity in what the present value of such an investment could have accrued to a beneficiary region.

To fully understand the institutionalised discrimination patent in the proposed formula, it is important to recognise that, whereas 70 per cent of Kenya’s revenue remains with the national government, the formula does not take this into consideration, yet we know the degree of political expediency that underpins the national government’s distribution of this revenue across various counties through infrastructural and social development programmes. Then, on the basis of only the 30 per cent allotted to counties, the Commission has designed the formula presently before the Senate, where again it proceeds to attach much weight to population and disregards its responsibility to assign equal weight to regional economic disparities and the need for affirmative action in favour of disadvantaged regions.

Why did the formula turn a blind eye on inter-governmental fiscal transfers over and above the amount allocated to county governments as their equitable share of the revenue raised nationally under Article 202(1)? Is it proper for the formula to fail to factor in the impact of five other types of transfers to counties by the national government, namely, conditional and unconditional grants, loans, the equalisation fund, and constituency development funds?

The formula and the range of reactions in its defense reveal gaps in the way marginalisation in Kenya is understood, defined and addressed. In other words those individuals who designed the formula are conditioning Kenyans to only consider the slices of cake and ignore the way the national cake is divided. Under a purposive and holistic interpretation of article 203 (1) (f) (g) and (h), the revenue allocation should consider the distribution of national government projects.

The information on how the national government projects are allocated to the various counties is easily accessible to the Commission and the public through the Presidential Service Delivery Website. Furthermore, the CRA needed to have conducted a structural audit assessment of various counties. Such an audit would assess the kilometres of paved roads, the hospitals, the bridges, power connection, water connection, accessibility to mobile telephony and internet infrastructure, number and quality of schools, among others. Take for example the two counties of Kiambu and Kakamega with a population of approximately 1.6 and 1.9 million people and a landmass of 2,500 km and 3,225 kilometres respectively. Kiambu has 1,145 km of bitumen roads against a mere 700 km for the entire Western Province which has five counties. Kiambu County has 1,145 primary schools against 460 for Kakamega, and a 7/1000 infant mortality rate in Kiambu compared to 65/1000 in Kakamega.

A good formula that accounts for the above reality must involve the conscious use of the normative system called the “Presidential Service Delivery” to examine the extent to which national government programmes comport with the notion of equitable economic development. The lack of conscious use of the process of developing the revenue sharing formula by the CRA to narrow the poverty and marginalisation gap undermines its possible instrumentality to secure a more equitable and just nation. It undermines the use of Independent offices and commissions in promoting checks and balances in the developmental process in Kenya. It is up to the Senate and CRA to consider using the revenue allocation formula not as a ritualistic policy obligation to be undertaken every five years but to deploy it in furthering the entrenchment of economic justice, equality and inclusion in the country.

The argument advanced by those supporting the formula that counties that generate more revenue should benefit from higher allocation is pretentious as it conceals the fact that their present economic advantages flow from the relative deprivation of other regions historically. The justifications mobilised by proponents of the formula as they seek to protect their privileged economic status is a type of absolution (to help them sleep at night) and is aptly captured by Albert Memmi, the Tunisian Jewish writer and one of the most influential theorists to emerge out of the post-World War II African decolonisation movement:

The fact remains that we have discovered a fundamental mechanism, common to all marginalization and oppression reactions: the injustice of an oppressor toward the oppressed, the formers permanent aggression or the aggressive act he is getting ready to commit, must be justified. And isn’t privilege one of the forms of permanent aggression, inflicted on a dominated man or group by a dominating man or group? How can any excuse be found for such disorder (source of so many advantages), if not by overwhelming the victim? Underneath its masks, oppression is the oppressors’ way of giving himself absolution.

In other words, to justify the formula is to totally disregard the important reports on historical marginalisation like the Truth, Justice and Reconciliation Report, that clearly pointed out those who are at the center and at the margin or periphery of national development.

The CRA’s mischief in the current stalemate regarding the formula to be used as the basis for sharing revenue among counties is a continuation of the disdain towards marginalised counties reflected in its recommendations to parliament with respect to the Second Policy on the Criteria for Identifying Marginalised Areas and Sharing of the Equalisation Fund in accordance with its mandate under Article 216(4) of the Constitution. The fund is a constitutional earmark of 0.5 per cent of annual revenue to be used to “provide basic services including; water, roads, health facilities and electricity to “marginalised areas”, as urged by article 204(2).

Under the second policy, the CRA departs from the first policy that had identified 14 counties in northern Kenya as marginalised areas and thus deserving of benefitting from the equalisation fund and instead identifies 1,424 administrative divisions across the 47 counties as “marginalised areas”. The policy choices in the CRA’s approach to the equalisation fund unravel when one realises that a good number of the administrative divisions identified are within the geographical limits of fairly well developed counties. Moreover, the choice of administrative units privileges national government structures and weakens the role of counties in the process. Worse, the choice shifts focus from the 14 historically marginalised counties whose economic exclusion the fund was intended to ameliorate. It assumes that parity in development has been achieved between the 14 counties and the rest of Kenya, a wildly fallacious assumption. Had the equalisation fund mechanism been implemented as envisioned in the constitution—with beneficiary counties managing the allocations—it could have assisted in cushioning marginalised counties in the event a formula favouring population as the overarching basis for revenue sharing is enacted.

In 2010, Kenya adopted a constitution that promised to address the daunting problem of ethno-regional economic discrimination. Its egalitarian tenets are evident in the quiet embrace of the principle of Ubuntu via Article 10 which holds “sharing” and “social justice” as defining values of our statehood.

As such, those at the CRA who developed the contentious formula must review their empirically unsupportable position that Kenya has made substantial progress in addressing marginalisation. We are persuaded by Malcom X’s assertion in his attack on race relations policies in the United States thus, “If you stick a knife nine inches into my back and pull it out three inches, that is not progress. Even if you pull it all the way out, that is not progress”. Progress is thus about healing the wound, and Kenya hasn’t even begun to pull out the knife of inequality. The CRA must stand up to its mission or disband.

Continue Reading