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The Politics of County Economies: Why Central Kenya MPs Are Wrong

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DAVID NDII pulls apart the old myth of Central Kenya’s economic dominance.

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The Politics of County Economies: Why Central Kenya MPs Are Wrong
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One of our problems is to decide how much priority we should give in investing in less developed provinces. To make the economy as a whole grow as fast as possible, development money should be invested where it will yield the largest increase in output. This approach will clearly favour the development of areas having abundant natural resources, good land and rainfall, transport and power facilities, and people receptive to and active in development.” – Sessional Paper No. 10 of 1965 on African Socialism and its Application to Planning in Kenya.

Can Central Kenya contribute 60 percent of Kenya’s GDP, as recently claimed, nay, asserted, by the region’s members of parliament? If 12 percent (old Central Province) or 20 percent (including Meru, Embu, Tharaka Nithi and Laikipia) percent of the work force is responsible for 60 percent of the economy, what does that say about the rest of the country. What would make Kikuyus or GEMA community four or five times more productive than other Kenyans?

The word “contribute” is a loaded one. It suggests that there is a common kitty called economy to which some people put in more than others. This is of course not the case. The economy is the sum total of the goods and services produced in the country. When Nyandarua grows potatoes that are consumed in Nairobi: which county has contributed more to the other’s economy? Neither—they have exchanged value, with each profiting from the other. The argument can also be a self defeating one. It justifies domestic import substitution. If we can champion “buy Kenya build Kenya”, why not “Buy Kilifi, build Kilifi”?

The word “contribute” is a loaded one. It suggests that there is a common kitty called ‘economy’ to which some people put in more than others.

The Central Kenya MPs are most likely to be under the impression that the region contributes more to the tax kitty. This is also a fallacy. The tax base and the economy do not overlap. Ideally they should but they do not. In an economy with our structure we have, a large informal sector and largely untaxed smallholder agriculture account for half the economy, the correlation between the economy and tax base is pretty low. The main sources of tax are profits, payroll taxes and consumption taxes (excise and VAT).

The Central Kenya MPs are most likely to be under the impression that the region contributes more to the tax kitty. This is also a fallacy.

The regions that contribute more to the tax base are those with larger corporatized economy. Though I do not have figures, I would expect the coastal counties to constitute a larger tax yield (revenue to GDP ratio) than central Kenya on account of high concentration of the corporatized economy— tourism, manufacturing, mining and logistics industry. The tourism establishments for example sell more highly taxed alcoholic beverages than consumed in central Kenya. They pay more VAT on food, and their employees pay PAYE which the presumably more productive and prosperous farmers of Central Kenya do not. If Central Kenya is so much more prosperous, the more pertinent political question would be whether it is paying its fair share of tax.

That cleared up, we can now turn to the question of county economies. Which counties have the strongest economies? The simple answer is we do not know. The Kenya National Bureau of Statistics (KNBS), the national statistics agency, only publishes national accounts for the whole economy. It is now publishing “County Statistical Abstracts” but these do not include GDP. Six years on, the counties have not found it worthwhile to measure the sizes of their economies even though this is part of their mandate, and it is not particularly difficult or expensive.

In response, I posted a graphic with two sets of figures of the relative size of county economies. One is an estimate of county GDPs computed by World Bank researchers, and published in a paper titled Bright Lights, Big Cities: Measuring national & sub-national economic growth from outer space in Africa, with an application to Kenya and Rwanda.

Which counties have the strongest economies? The simple answer is we do not know. The Kenya National Bureau of Statistics (KNBS) only publishes national accounts for the whole economy. It is now publishing “County Statistical Abstracts” but these do not include GDP. Six years on, the counties have not found it worthwhile to measure the sizes of their economies even though this is part of their mandate, and it is not particularly difficult or expensive.

This methodology is actually more technically sophisticated than it sounds. If one looks at a satellite image of earth taken at night, it becomes apparent that the night lights closely mirror the economic geography of the world. In fact, because the intensity of lights is captured accurately up to a square kilometre, they provide much more detailed geographical coverage than statisticians use to calculate national GDP. Moreover, night lights provide real time data while statistical samples can fall hopelessly out of date, as revealed by the latest rounds of “rebasing” which saw upward GDP revisions ranging from 13 percent in Uganda, 30 percent in Tanzania, to 90 percent in Nigeria. One only frowns at the night lights if they do not know what statisticians do in the kitchen. But as it turns out in fact that over time, the night lights estimate tracks the statistically estimated GDP growth quite well.

For the second series, I used household consumption expenditure shares from the most recent household budget survey data published by the KNBS, the Kenya Integrated Household Budget Survey (KIHBS 2015/16). This is the survey data that is used to measure poverty as well as to update the consumption basket used to calculate the rate of inflation. Household consumption expenditure is the largest component of GDP. Although the percentage is bound to vary from county to county, we have no reason to expect that to be very large. In general, survey data is more reliable than the methods used to estimate GDP, hence it provides a good check for the night lights data.

Another useful source of information is the relative size of a county’s workforce. In a fully integrated economy with free movement of labour and capital, the size of a region’s economy would be proportional to the labour force: if County A accounts for 5 percent of the workforce, then it should also account for 5 percent of GDP. This is because labour and capital will move to where the opportunities are until capital per worker, and in effect production per worker is the same across the whole economy.

Readers of this column may recall that I used this argument to respond to the urban legend, which still persists, that Nairobi accounts for 60 percent of GDP (people who make up numbers seem to like 60 percent). I argued that Nairobi’s GDP was at best between 15 and 20 percent of GDP. This was based on Nairobi accounting for 10 percent of the national labour force, and allowing for more capital than the national average. As we will see shortly, the estimate was overgenerous.

The conventional definition of labour force is population aged 15-64. Ideally, we should use actual participation rates because many young people between 15 – 24 are in full time education, and many older people also work full time, but this data is not readily available on a county by county basis. We will just have to assume that the youth and older people’s participation rates do not vary too much across counties. I use the data published in the Labour Force Survey Report 2015/16, which is part of the KIHBS 2015/16.

We want to see whether the three sources tell the same story. We call this research strategy i.e. cross-validating different data and methodologies, triangulation.

We are in luck. The three sources are remarkably consistent. The correlation between the night lights GDP and household expenditure is 70 percent, between the night lights GDP and labour force is 73 percent, and between household expenditure and labour force shares is 90 percent (see charts). The strong correlation between the night lights GDP and labour force shares tells us that the bright lights GDP is pretty good. We can conclude from these correlations that all these data are telling us the same story. What is the story?

Second, all three tell us that Nairobi has the largest economy as expected, but it is a far cry from 60 percent. The night lights GDP puts it at 12.7 percent, while the expenditure share puts it at 20 percent. But the labour force share weighs in close to the night lights GDP at 12 percent.

The counties with the largest economies according to the night lights GDP are Nairobi(12.5%), Kiambu (11.1) Nakuru (8.5%). Between them, they account for 32% of the GDP.

The household expenditure data have the same order, and their combined share is also about the same (31%) but Nairobi’s share is much bigger (19.8%) while Kiambu and Nakuru are closer at 5.6% and 5.2% respectively. Eight other counties have large economies between 3 and 4 percent of GDP (Nyeri Kilifi, Kajiado, Machakos, Kwale Mombasa and Meru). With the notable exceptions of Nyeri and Kwale, their expenditure shares are also in line with the GDP shares. However, when it comes to the GDP and labour force, Kiambu, Kwale, Nyeri and Nakuru have much larger shares of GDP than their share of the labour force. I will come back to this shortly.

Nairobi has the largest economy as expected, but it is a far cry from 60 percent. The night lights GDP puts it at 12.7 percent, while the expenditure share puts it at 20 percent.

At the other end of the scale, Isiolo, Lamu, and Samburu have the smallest economies accounting for 0.2 percent of the national GDP each, followed by Marsabit, Tharaka-Nithi and Elgeyo Marakwet at 0.4 percent, Nyamira and West Pokot follow at 0.6 percent and Baringo and Tana River, 0.7 percent each, complete the ten smallest county economies. There is very close correspondence between the between the GDP and household expenditure in the small counties.

It’s worth pointing out here that the size of the county’s economy has no bearing on the incomes and well being. Whereas Lamu, Isiolo and Samburu are the smallest counties, Lamu’s incidence of poverty (28.5) percent is well below the national average of 36 percent; both Isiolo (56 percent) and Samburu (75 percent) are much higher. In fact, in terms of incomes and poverty Lamu, the smallest economy compares favorably with Nakuru, the third largest. This should put to rest those who are wont to argue that small counties are not economically viable. The Seychelles (Pop. 100,000, less than Lamu’s 130,000) has an average income ten times Kenya’s.

What explains the large difference between Nairobi’s GDP and household expenditure share.   Why are Kiambu and Nakuru’s GDP estimates so much larger than their shares of the labour force. Are there plausible economic explanations, or is it flaws in the data?

For Nairobi, cost of living is a plausible and likely explanation, in particular housing costs which are much higher than elsewhere. According to a national housing survey conducted by KNBS a few years ago, housing costs for house-renting Nairobi households take 40 percent of expenditures, a third more than the next highest, Mombasa and Kiambu, at 30 percent. Rural house renting households spent an average of 13 percent. Although the report does not give the percentages, we do know that Nairobi has a much larger percentage of renting households than other counties. Overall, 70 percent of urban households are renters, while 90 percent of rural households are owners. You would not know it from listening to Nairobi’s navel-gazing middle class going on about home ownership and mortgage interest. In aggregate 70 percent of Kenyans live in their own homes, and a good percentage of urban renters own decent debt-free rural homes. Home ownership is not a national priority, but I digress.

The large divergence of GDP and labour force shares is perhaps the more economically meaningful and insightful one. The straightforward interpretation of this observation is that the GDP per worker in Kiambu and Nakuru is considerably higher than average. Is this plausible? In the Census of Industrial Production conducted in 2010, Kiambu had 206 factories, second to Nairobi with 1090, out of a national total of 2252 establishments. In effect, Kiambu accounts for close to a fifth of the factories outside Nairobi. This is not a surprise given that Thika and Ruiru are large industrial towns, but even in my rural home I can count least six fairly large factories within shouting distance (4 tea factories, a chicken processing plant, and a dairy processor) and thats not counting the Bata shoe and a couple of other factories in Limuru town.

Nakuru may not count as many factories, only 95, but it certainly has a lot of capital. The country’s entire geothermal electricity industry, the flower industry as well as a very significant hotel industry around Lake Naivasha—that is a fair amount of capital. This ratio seems to be capturing, as it should, the capital intensity of the counties’ economy. If this is indeed what these data are telling us, then it is worthwhile to pay more attention to them, because they are conveying important information about the structure and character of the economy.

In the Census of Industrial Production conducted in 2010, Kiambu had 206 factories, second to Nairobi with 1090, out of a national total of 2252 establishments. In effect, Kiambu accounts for close to a fifth of the factories outside Nairobi.

If capital was evenly distributed across the country, all the ratios would be clustered around around 1. The actual ones range from 0.4 to 2.3. Kiambu’s ratio is the highest at 2.3 followed by Kwale and Nyeri (2) and Nakuru (1.9). There are three more counties with a ratio of 1.5 or higher, that is GDP share is 50 percent more than labour force share, Kajiado, Laikipia and Murang’a. Interestingly, Nairobi is not one of them. In fact, Nairobi is in the middle of the pack with a share just 10 percent higher, alongside Tana River. At the other end of the scale we have Elgeyo Marakwet and Nyamira with a GDP share which is 40 percent of the labour force share, and 12 counties where it is 50 percent. Looking at this pattern, it is readily apparent that the counties at the top are generally wealthier, while those at the bottom are poorer. The wealthier counties have more capital.

We have what looks like credible estimates of county GDP shares, we have each county’s labour force, and we also have the conventional national GDP. With these we are able to compute GDP per worker for each county, which will give us an idea which counties have the strongest economies. Kiambu comes out on top with a 2016 GDP per worker of Sh. 673,000. This is telling us that people in Kiambu produced on average Ksh. 56.000 worth of goods and services per person per month. The ten strongest economies are Kiambu, Kwale, Nyeri, Nakuru, Kajiado, Laikipia, Muranga, Garissa, Kilifi and Machakos.

One of the striking findings is that the big city counties are not among the strongest economies.

Nairobi and Mombasa are about the same at 14th and 15th respectively with a GDP per capita of Sh. 300,000 and Kisumu is 16th with Sh. 263,000. Obviously Kisumu is both urban and rural – Kisumu City on its own would probably be comparable with Nairobi and Mombasa. Still, these data put some question marks on the widely held belief that big cities are the engines of economic growth. To be sure there could be other explanations. The cities, Nairobi in particular could have a larger share of young people in full time education and unemployed, but these are puzzles for curious students to write dissertations on.

One of the striking findings is that the big city counties are not among the strongest economies. Nairobi and Mombasa are about the same at 14th and 15th respectively with a GDP per capita of Sh. 300,000 and Kisumu is 16th with Sh. 263,000.

More significantly perhaps we also do not see an economically dominant region. Kwale’s economy compares favourably with Nyeri, both in absolute size and productivity. Kirinyaga sits next to Wajir in terms of productivity. Makueni is more productive than Nyandarua.

This is not to say that we’ve heard the last of central Kenya politicians’ ethnic chauvinism. As Bertrand Russell observed long ago, a man offered a fact that goes against his instincts will scrutinize it closely, and unless the evidence is overwhelming, refuse to believe it; but offered something which affords a reason for acting in accordance to his instincts, he will accept it even on the slightest evidence.

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David Ndii is a leading Kenyan economist and public intellectual.

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Unlike the Rest of the UN, Is WHO (Finally) Taking Sexual Abuse Seriously?

A disturbing report on the sexual exploitation and abuse of women and children in the DRC has laid bare the failure of UN agencies to protect vulnerable populations.

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Unlike the Rest of the UN, Is WHO (Finally) Taking Sexual Abuse Seriously?
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It is extremely unfortunate that at a time when the World Health Organization (WHO) is spearheading a campaign to get people vaccinated against COVID-19, and pushing rich countries to donate their vaccines to low-income countries instead of hoarding them, it is confronted with revelations that suggest deep systemic failures within the global health agency that have allowed its employees to get away with sexual exploitation and abuse of vulnerable populations.

Last month, WHO released a report that confirmed that there was sexual abuse of women and children by WHO employees in the Democratic Republic of the Congo (DRC) during an outbreak of Ebola in the country’s North Kivu and Ituri provinces between 2018 and 2020. This report was the result of an independent commission’s investigations following an exclusive media report last year that found that dozens of women in the DRC had been sexually exploited by aid workers, including WHO employees.  The most disturbing revelation was that some of the perpetrators were medical doctors. Many of the abused women were offered jobs in exchange for sex; others were raped or coerced into having sex against their will. There were also stories of women being forced to have abortions after they were sexually abused. The independent commission stated that its findings showed that 21 of the 83 alleged perpetrators were WHO employees, and that “individual negligence” on the part of WHO staff may have amounted to “professional misconduct”.

This is not the first time that sexual abuse and exploitation of women and children by UN employees has been reported in the DRC. In 2004, UN Secretary-General Kofi Annan ordered an investigation into sexual abuses by UN peacekeepers in the country after it became apparent that such abuse was widespread in this mineral-rich but conflict-ridden country.  The investigation detailed various forms of abuse, including trading sex for money and food. It was in the DRC that the term “peacekeeper babies” first emerged. Women who had given birth after being raped by UN peacekeepers spoke about being abandoned by both their families and the peacekeepers who had impregnated them. However, the report had little impact on the UN’s peacekeeping mission in the DRC – none of the perpetrators were brought to book nor were the victims compensated.

Sexual abuse of vulnerable populations, especially women and children, is particularly rampant in UN peacekeeping missions.  In 2017, the Associated Press revealed in an exclusive report that at least 134 Sri Lankan UN peacekeepers had exploited nine Haitian children in a sex ring from 2004 to 2007. Many of the victims were offered food or money after they were sexually violated. (These “sex-for-food” arrangements have also been reported in other countries experiencing conflict or disaster.) Although 114 of these peacekeepers were sent home after the report came out, none of them were prosecuted or court-martialled in their countries.

One reason why UN peacekeepers evade the consequences of their actions is that under the Status of Forces Agreement negotiated between the UN and troop-producing countries, UN peacekeepers fall under the exclusive jurisdiction of the country they come from. When cases of abuse are reported, they are either ignored by the countries, or the perpetrators are sent home—no questions asked.

Unfortunately, civilian UN staff who commit crimes such as rape also evade any legal action because the UN accords the UN and its employees immunity from prosecution. This immunity can only be waived by the UN Secretary-General, but the Secretary-General hardly ever waives this immunity even when there is overwhelming evidence against a UN staff member. This means that cases brought against UN employees cannot be tried in national courts, nor can the perpetrators be detained or arrested by national law enforcement agencies.  

At a press conference held last month, WHO’s director-general, Tedros Adhanom Ghebreyesus, apologised to the victims of the abuse in the DRC at the hands of WHO employees and promised to take action to prevent such abuse from happening again. “I am sorry for what was done to you,” he said. “What happened to you should not happen to anyone.”

The head of WHO has also promised to review the organisation’s emergency response measures and internal structures and to discipline those staff members who fail to report cases of sexual exploitation and abuse. WHO member states have also called for an “immediate, thorough and detailed assessment of what went wrong”.

I have no doubt that Mr Ghebreyesus is serious about fixing a problem that has plagued the UN for decades. In fact, his response to the sexual abuse allegations is much more honest and sincere than the responses of other heads of UN agencies whose employees have been accused of allowing sexual exploitation and abuse to occur under their watch. One, he established an independent commission to look into the sexual abuse allegations, which rarely happens. (Most UN agencies either ignore the allegations or order an internal investigation, which invariably determines that the allegations “could not be substantiated”.) Two, he has publicly committed to undertake wholesale reforms in WHO’s structures and culture that allow sexual exploitation and abuse of vulnerable populations to go undetected, unreported and unpunished. Three, he has agreed to the independent commission’s recommendation that an independent monitoring group be set up within two months to ensure that the commission’s recommendations are enforced.

“What happened to you should not happen to anyone.”

Most UN agencies would not welcome such intense scrutiny of their operations by independent bodies, so WHO’s efforts in this regard are laudable.  WHO’s actions could also be attributed to the fact that, unlike other UN agencies that report to the General Assembly, WHO reports to the World Health Assembly that comprises delegates that have technical competence in health matters and represent their governments’ ministries of health. Because it is a specialised UN agency not governed by the General Assembly, WHO can establish its own rules without deferring to the General Assembly. In this sense, WHO enjoys relative autonomy from the UN system’s gargantuan and highly opaque bureaucracy.

Cover-ups and impunity 

WHO’s response is a far cry from the normal tendency of UN bosses to cover up cases of sexual abuse and exploitation taking place under the UN’s watch.  In 2014, for instance, when a senior UN official reported to the French government that French peacekeepers operating in the Central African Republic were sexually abusing boys as young as eight years old, his bosses at the Office of the UN High Commissioner for Human Rights (OHCHR) responded by asking him to resign. When he refused to do so, they suspended him for “unauthorized disclosure of confidential information”, and, in a typical case of “shooting the messenger”, they directed their internal investigations towards him rather than towards the peacekeepers who had allegedly abused the children. This case, which received wide media coverage, did not lead to significant changes in how the UN handles sexual abuse cases. On the contrary, Anders Kompass, the UN official who reported the abuse, was retaliated against, and eventually left the organisation in frustration.

Cases of UN employees sexually abusing or harassing their colleagues are also brushed under the carpet. In 2018, for example, when an Indian women’s rights activist accused the United Nations Population Fund (UNFPA)’s India representative of sexual harassment, the UN agency said that its preliminary investigations showed that her allegations could not be substantiated. The Code Blue Campaign, which tracks instances of sexual harassment and exploitation by UN employees, dismissed the findings of the investigation, calling them a “cover-up.” (Soon after the activist made her allegation, UNFPA evacuated the accused from India, which further muddied her case.)

This is not an isolated case. In 2004, when a staff member at the UN’s refugee agency accused the head of the organisation of sexual harassment, the UN Secretary-General, Kofi Annan, dismissed her claims. Recently, a woman working at UNAIDS lost her job soon after she filed a complaint of sexual harassment against UNAIDS’ deputy executive director. This was after Michel Sidibé, the then head of UNAIDS, told a staff meeting that people who complain about how the agency was handling sexual harassment “don’t have ethics.”

The UN’s highly patriarchal and misogynistic culture allows such abuse to continue unabated. In 2018, the UN conducted an internal survey that found that one-third of the UN employees surveyed had experienced sexual harassment. It revealed that the most vulnerable targets were women and transgender personnel aged between 25 and 44. Two out of three harassers were male and only one out of every three employees who were harassed took any action against the perpetrator. About one in ten women reported being touched inappropriately; a similar number said they had witnessed crude sexual gestures.

Another survey by the UN Staff Union found that sexual harassment was one among many abuses of authority that take place at the UN. Results of the survey showed that sexual harassment made up about 16 per cent of all forms of harassment. Forty-four per cent said that they had experienced abuse of authority; of these, 87 per cent said that the person who had abused his or her authority was a supervisor. Twenty per cent felt that they had experienced retaliation after reporting the misconduct.

The UN’s highly patriarchal and misogynistic culture allows such abuse to continue unabated.

Since then, the UN has established a new sexual harassment policy and a hot line for victims of sexual harassment. However, remedial actions spelled out in the policy appear to be mediation or counselling exercises rather than disciplinary ones. The emphasis is on psychosocial support and counselling (for the victims, of course) and “facilitated discussions” between the “offender” and the “affected individual”. Disciplinary measures include physical separation of the offender from the victim, reassignment, and temporary changes in reporting lines. Official internal investigations are permitted, but as I have tried to illustrate, most internal UN investigations into cases of sexual harassment and other kinds of wrongdoing inevitably conclude that the sexual harassment or wrongdoing “could not be substantiated.” This leaves victims vulnerable to retaliation.

Perhaps WHO can lead the way in showing the rest of the UN system how to tackle sexual exploitation, abuse and harassment by UN employees. WHO has already terminated the contracts of four of its employees who were accused of sexually exploiting women in the DRC. However, a true test of WHO and the UN’s commitment to end such abuses would be if they reinstated all those who were fired for reporting such cases. I for one am eagerly awaiting the independent monitoring group’s findings on whether or not WHO has taken tangible and impactful measures to protect people from being sexually abused and exploited by its employees and to safeguard the jobs of those who report such abuses.

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The Retrospective Application of Constitutional Statutes: Notes From the High Court of Kenya

Katiba Institute adds to the growing comparative discussion around constitutional statutes and therefore ought to be keenly studied by students of comparative constitutional law.

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Previously, I have discussed the concept of constitutional statutes. Recall that a constitutional statute is a law that is “enacted in pursuance of the State’s positive obligation to fulfil a constitutional right.” While certain constitutional rights are self-enforcing (such as, for example, the right to free speech ipso facto prohibits the State from engaging in arbitrary censorship), others – by their very nature – require a statutory framework to be made effective. For example, the right to vote cannot be made effective without an infrastructure in place to conduct free and fair elections, including the existence of an independent, non-partisan Election Commission. Insofar as such a legislative framework is not in existence, the state is arguably in breach of its positive obligations to fulfil the right in question. Thus, to refine the definition further, a constitutional statute is a statute that “provides a statutory framework towards implementing a fundamental right, thereby fulfilling the state’s positive obligation to do so.”

What follows from the finding that a particular law is a constitutional statute? On this blog, we have discussed constitutional statutes in the context of amendments to the Right to Information Act, which have sought to undermine the independence of the Information Commissioners. We have argued that, insofar as constitutional statutes stand between the individual and the State, mediating the effective enforcement of rights, legislative amendments that prevent them from fulfilling this function, are thereby unconstitutional. Furthermore, once a constitutional statute has been enacted, the principle of non-retrogression applies – that is, the legislature cannot simply repeal the law and go back to a position where the right in question was unprotected. Another example discussed on this blog is the recent judgment of the Kenyan Court of Appeal in David Ndii, where it was held that the implementation of the Popular Initiative to amend the Kenyan Constitution required a legislative scheme, as also its discussion of the previous judgment in Katiba Institute, where an attempt to reduce the quorum for resolutions of the Independent Electoral and Boundaries Commission was held to be unconstitutional.

The judgment of the High Court of Kenya of 14 October 2021 – also titled Katiba Institute – provides an additional, fascinating implication that flows from the finding that a law is a constitutional statute. Katiba Institute arose out of the efforts of the Government of Kenya to implement a national biometric identification system called NIIMS, and the judgment of the High Court with respect to a challenge to the constitutionality of NIIMS (Nubian Rights Forum), which we discussed on this blog back in 2019. Recall that in Nubian Rights Forum, after a detailed analysis, the High Court struck down a part of NIIMS, and allowed the government to go ahead with the rest of the programme subject to the implementation of an effective data protection law. Therefore, as I had noted in that post:

The High Court’s decision – at least in part – is a conditional one, where the (legal) future of the NIIMS is expressly made dependant on what action the government will take. Thus, there remain a significant number of issues that remain open for (inevitable) litigation, even after the High Court’s judgment.

Notably, Kenya had enacted a data protection law in between the hearings and the judgment, but the High Court – in its verdict – was insistent that until the point of effective implementation, the continued rollout of NIIMS could not go on. And this was at the heart of the challenge in Katiba Institute: the applicant argued that NIIMS had been rolled out, in particular, without complying with Section 31 of the Kenyan Data Protection Act, which required a Data Impact Assessment as a pre-requisite to any data collection enterprise. In response, the state argued that the data collection in question had already been completed before the passage of the Data Protection Act, and that therefore – in accordance with the general principle that statutes are not meant to apply retrospectively – Section 31 was inapplicable to this case.

Engaging in impeccable constitutional statute analysis, Justice Jairus Ngaah noted that the Data Protection Act was “enacted against the backdrop of Article 31 of the Constitution.” Article 31 of the Constitution of Kenya 2010 guarantees the right to privacy. As the learned Justice noted, in its very preamble, the DPA stated that its purpose was to “give effect to Articles 31(c) and (d) of the Constitution.” Justice Ngaah then rightly observed, “The need to protect the constitutional right to privacy did not arise with the enactment of the Data Protection Act; the right accrued from the moment the Constitution was promulgated.”

The judgment of the High Court of Kenya provides an additional, fascinating implication that flows from the finding that a law is a constitutional statute.

It therefore followed that, on the balance, an interpretation that gave the DPA retrospective effect was to be preferred over one that did not. A contrary interpretation would mean that the state was entitled to collect data and infringe the right to privacy even in the absence of a legislative scheme. Or, in other words, having failed to implement its positive obligation to enact a constitutional statute to give effect to the right to privacy, the state could then take advantage of its own failure by nonetheless engaging in data collection enterprises anyway. This, naturally, could not be countenanced. And in any event, given that Article 31 had always existed, it followed that:

. . . there was always the duty on the part of the State to ensure that the Bill of Rights . . . is respected and protected. Section 31 of the Act does not impose any more obligation or duty on the state than that which the state, or the respondents . . . have hitherto had to bear.

On this basis, Justice Ngaah therefore held that NIIMS had been rolled out in breach of Section 31, and therefore, first, quashed the rollout itself, and secondly, issued a mandamus restraining the State from rolling it out again without first complying with Section 31.*

The judgment in Katiba Institute does not, of course, answer the number of questions that still remained to be resolved after the Nubian Rights Forum judgment, including some problematic aspects of the DPA itself. Those questions were not, however, before the court in this instance; on the other hand, the court’s finding that constitutional statutes apply retrospectively – and the reasons for that finding – make it a landmark judgment. Katiba Institute adds to the growing comparative discussion around constitutional statutes, Fourth Branch bodies, and “Guarantor Institutions”, and therefore ought to be keenly studied by students of comparative constitutional law.

* One cannot, of course, help comparing this with the judgment of the Indian Supreme Court in the Aadhaar case, where despite the fact that Aadhaar data was collected for more than five years without any law whatsoever, it was retrospectively validated by the Supreme Court.

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The Pandora Papers Reveal the Dark Underbelly of the United Kingdom

Through its network of tax havens, the UK is the fulcrum of a system that benefits the rich and powerful.

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There’s the role, for instance, played by the British Virgin Islands, an overseas territory of the UK that functions as a tax haven. Czechia’s multimillionaire prime minister used the territory to hide his ownership of a chateau in France. Others, including the family of Kenyan president Uhuru Kenyatta and Vladimir Putin’s PR man, have made similar use of the islands to conceal wealth – while Tony and Cherie Blair reportedly saved £312,000 in stamp duty when they bought a London property from a company registered in the British Virgin Islands in 2017.

Then there’s London itself. The leaked documents show how the King of Jordan squirreled personal cash away in the capital’s property market, as did key allies of Imran Khan, Pakistan’s president.

More details will emerge in the coming days. But one thing is already clear. This isn’t a story about countries on the periphery of the world economy. It is a story about how the British state drives a global system in which the richest extract wealth from the rest.

British through and through

The British Virgin Islands were captured by England from the Dutch in 1672. By then, the indigenous population had already gone – either slaughtered in an unrecorded genocide or fled for fear of one. The islands have been a haven for pirates of various sorts ever since.

But this is just one part of Britain’s offshore network. There are around 18 legislatures across the globe that Westminster is ultimately responsible for. These include some of the worst offenders in the world of money laundering, tax dodging and financial secrecy. The Cayman Islands are British. So is Gibraltar. So are Anguilla and Bermuda.

These places aren’t just British in an abstract sense. Under the 2002 British Overseas Territories Act, their citizens are British citizens. They operate under the protection of the British diplomatic service. And, when need be, they can rely on Her Majesty’s Armed Forces: in the last 40 years, Britain has twice gone to war to defend Overseas Territories. Once was when Argentina tried to claim back the Falklands/Malvinas. The other time was the invasion of Iraq, when the British government claimed that Saddam Hussein’s weapons programme threatened its military bases at Akrotiri and Dhekelia on the island of Cyprus.

This complexity is no accident

In total, experts estimate, Britain and its overseas territories are responsible for facilitating around a third of the total tax dodged around the world. And that’s before we consider money stolen by corrupt rulers, or the proceeds of crime. Not to mention the way that billionaires’ hidden wealth allows them to influence our political systems in secret.

This complexity is no accident. The UK, unlike almost any other country on earth, lacks a written constitution. The rules about how the rules are made are set through ‘convention’, an endless fudge that ultimately amounts to them being made up by our rulers as they go along.

We see this most clearly in how the domestic territories of the British state are governed: Scotland, Wales, Northern Ireland, Greater London and the City of London each has its own arrangements, each absurd in its own way. Each of these messes leaves a different tangled thicket in which the crooks of the world can hide their cash.

Seen from the perspective of international capital, though, it is the Overseas Territories, as well as the Crown Dependencies of Jersey, Guernsey and Mann, which form the most significant part of this complex. They use the malleability of the British constitution to form a network of safes in which the rich can hide their cash.

A new era

Although no one knows for sure how much money is hidden in tax havens, of which the British territories make up a significant chunk, the figures involved are so vast that academics at the Transnational Institute in the Netherlands have described them as “the backbone of global capitalism”.

Seen this way, the constitutional flexibility of the British state isn’t just some post-medieval hangover. It’s a hyper-modern tool in an era of global surveillance capitalism, where the rich can flit around offshore while the rest are forever trapped by borders.

Through its empire, the British state played a key role in inventing modern capitalism. Now, the UK is helping reinvent capitalism once more, by extending the protection of a constitution designed by the powerful, for the powerful, to the billionaires, oligarchs and criminals of the world.

Adam Ramsay is openDemocracy’s main site editor. You can follow him at @adamramsay. Adam is a member of the Scottish Green Party, sits on the board of Voices for Scotland and advisory committees for the Economic Change Unit and the journal Soundings.

This article was  first published by Progressive International

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