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Shopping Mall Economics: A Note on the Value of the Kenya Shilling

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What does a recent spat between the IMF and the Central Bank’s Prof Patrick Njoroge, himself a veteran of the Fund, tell us about the state of the Kenya shilling? By DAVID NDII.

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Shopping Mall Economics: A Note on the Value of the Kenya Shilling
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Is the Kenya shilling overvalued or not? According to the IMF it is currently overvalued by 17 percent. In an unusually combative response to his former employer the Central Bank governor says that is only off-kilter by 5 percent and accuses the IMF of making Kenya a “guinea pig in its new approach.” The offensive claim, contained in the IMF’s latest report on the country dated October 2018, states as follows:

“The EBA-lite methodology for the exchange rate suggests that the external position is weaker than fundamentals. The current account approach shows that the current account deficit (both actual and cyclically adjusted) are above the norm (the CA gap is -2.5 percent), suggesting an overvaluation of about 17.5 percent of the real exchange rate. This can only marginally be explained by the policy gap. The REER approach also shows a similar-size of overvaluation, equivalent to about 18.0 percent. Again, the policy gap is marginal. Given the continued appreciation of the real exchange rate, the external position is assessed to be weaker than fundamentals. Regarding the last approach, the external sustainability approach, it was not possible to use it as the international investment position data is not yet produced by the authorities.”

This needs a fair amount of disambiguation. EBA is a needless acronym that stands for external balance approach for exchange rate assessment. The methodology is described in an IMF paper published in 2013 as an update of a previous methodology known as CGER. CGER is another needless acronym for consultative group for exchange rate assessment. This EBA thing appears to be what the CBK governor is referring to as a new approach.

The methodological spat is a red herring. Economic models are tools, not oracles. What we have here is workmen quarrelling over tools. Our top three economic mandarins are former IMF staffers. Surely, as former colleagues, they can sit together with their colleagues and their models and converge on an assessment as to whether the shilling is overvalued or not?

The IMF refers to three methodologies: the Real Effective Exchange Rate (REER), the current account and external sustainability approach. Of the three, the REER is the most intuitively understandable and also the one for which we have data. But what is this animal the REER?

The methodological spat is a red herring. Economic models are tools, not oracles. What we have here is workmen quarrelling over tools. Our top three economic mandarins are former IMF staffers. Surely, they can sit together with their colleagues and their models and converge on an assessment as to whether the shilling is overvalued or not?

Suppose bananas are retailing at KSh 100 shillings a bunch in Kenya. The Kenya/Uganda shilling exchange rate is one to ten. At this exchange rate and banana price, 20 percent of bananas are coming from Uganda. Suppose price of Kenyan bananas goes up to KSh 125 a bunch (e.g. because of increase in taxes), and exchange rate remains the same. Ugandans can continue to sell bananas in Kenya profitably at KSh 100 while many Kenyan producers cannot. In fact, Ugandans are likely to hike their price to let us say KSh.110 making Kenya an even more profitable market than their home market. Uganda bananas will flood the market and put Kenyan producers who are not profitable at Ksh. 110 out of the banana business. For the market to remain at the old equilibrium (i.e. 20/80 Uganda/Kenya market share) requires Kenya shilling to fetch USh. 8.00 so that to get USh. 1000 as before, the Ugandans will also have to sell their bananas at KSh125.

Its readily apparent that if our domestic prices go up faster than those of our trading partners, then foreign goods will keep becoming cheaper. But you cannot tell by just looking at the dollar shilling exchange rate. We need to factor in the price movements with every trading partner. The REER is an index that combines the relative exchange rate and price movements of all our trading partners.

If the REER is rising, our goods are becoming more expensive. We can expect to import more and export less. If this happens our trade deficit will widen. If the trade deficit continues to widen, we run the risk of defaulting on our international obligations in particular debt service and repatriation of profits and capital. This is where the IMF comes in. The IMF’s mandate is to maintain international financial stability. The IMF is a financial cooperative whose job it is to ensure members do not run into external payments difficulties, and to bail them out when they do, in order to keep global finance and commerce going.

The spat between the IMF and the CBK is therefore about our external creditworthiness. The key indicator for this is the current account balance. The current account balance has two components: trade and income. The trade account I have already mentioned. The income account consists of payments for “factor services” such as interest (use of capital), labour (e.g. for services of Kenyan troops abroad) and another component we call unrequited transfers (meaning money we have not earned) such as diaspora remittances, grant aid and such like. The external account in turn, has a third component, the capital account where, as the name suggest, we record investment transactions.

The spat between the IMF and the CBK is…about our external creditworthiness. The key indicator for this is the current account balance.

This is how it works. Kenya Airways buys an aircraft using a foreign loan. The aircraft is entered in the trade account as an import and simultaneously in the capital account as a capital inflow. The following day it ferries passengers from Lagos to Dubai. The income is recorded in the trade account as a service export. At the end of the month it remits repayment on the loan. The interest is recorded in the income account as a factor service payment and the principal is in the capital account as a capital outflow.

The net of the current account and the capital account are added together to give the overall balance. An increasing overall deficit depletes foreign reserves, while a surplus leads to a build up of reserves. Current account surpluses mean that a country’s savings exceed its investment; it can, therefore, export capital, like China. A current account deficit means that a country is investing more than its savings, in other words, it is importing capital (either debt, FDI, remittances, grants etc).

The country’s creditworthiness thus depends not just on trade but also on other financial flows, that are determined by factors other than trade competitiveness, both economic and non-economic. Complicated stuff.

Both the IMF and CBK agree that the shilling has appreciated, but they disagree on the magnitude. The IMF also implies that the appreciation is a reflection of policy action while the CBK maintains that it is a reflection of market forces. The IMF view translates to accusing the CBK of misleading the public by espousing a monetary policy that claims to target inflation, while in practice it is actually targeting the exchange rate. The IMF’s “smoking gun” is the fact that the NEER has flatlined for the past six years (see Chart).

Recently the IMF re-classified the Kenya shilling from a “floating” (meaning market determined) to “other managed arrangement.” This means the IMF is convinced that the Central Bank is propping up the shilling. What reason would the Central Bank prop up the shilling especially if it undermines the country’s competitiveness and solvency?

Foreign currency debt exposure is one reason. The interest payments on the first Eurobonds issued in 2015 ($185 million a year) has increased by KSh 3 billion, KSh 16 billion to KSh 19 billion on account of the depreciation of the shilling. Translate that to the total interest payments this year which are in the order of $1.4 billion dollars. The shilling has weakened by about three shillings to the dollar since the beginning of the financial year. The total interest payments this year which are in the order of $1.4 billion. This translates to a KSh 4 billion squeeze on a government that is already living way beyond its means. The last thing the Treasury wants to hear is that the shilling should be trading at about 120 to the dollar.

Recently the IMF re-classified the Kenya shilling from a “floating” (meaning market determined) to “other managed arrangement.” This means the IMF is convinced that the Central Bank is propping up the shilling. What reason would the Central Bank prop up the shilling especially if it undermines the country’s competitiveness and solvency?

Another reason is pressure to keep low interest rates. Interest rate is the policy instrument in an inflation-targeting monetary policy regime such as we claim to have. Central Banks are given statutory independence over the conduct of monetary policy to insulate them from such pressure so that they can raise interest rates when they need to, even when it is politically costly for the government of the dayParliament’s capping of interest rates two years ago is ample demonstration that political pressure on Central Banks is real.

Keeping interest rates artificially low puts pressure on the exchange rate. A weakening currency creates inflationary pressures, which is what the Central Banks are mandated to control in the first place. The Central Banks end up trying to meet incompatible objectives, low interest rates, low inflation and a stable currency.

This is precisely what happened from mid-2009 to September 2011. The Central Bank bent over backwards to accommodate the government’s economic stimulus meant to respond to both the post-election violence and the global financial crisis. Interests rate were driven to the floor. From mid-2010 to mid-2011 the benchmark 90-day Treasury bill rate was kept below 3 percent. The IMF’s charts show how this ended— with a very hard landing. The shilling which had been propped up at about 80 to the dollar, started unravelling in April peaking at KSh100 to the dollar in September. The Central Bank was forced to jack up interest rates in a hurry. By the end of 2011, the T-bill rate was heading to 20 percent.

The IMF seems to believe that, left to market forces, the shilling will depreciate in real terms. The IMF’s REER chart covers eight years, from 2010 to 2017. A longer timespan does not necessarily support this contention (see Chart). My chart goes back to the beginning of the liberalized regime in 1994. What do we see? The shilling has been appreciating in real terms since it was liberalized. Overall it has appreciated 157 percent, by 9 percent per year on average. This could mean that the Government has been propping up the shilling all these years, or that market forces are not working the way the IMF expects.

Many Kenyans have observed that we have become an importing country. One also hears policymakers lamenting that we are losing our markets in the region and blaming all manner of things. There is no mystery to it.

My [assessment is that] the shilling has been appreciating in real terms since it was liberalized. Overall it has appreciated 157 percent – by 9 percent per year on average. This could mean that the Government has been propping up the shilling all these years, or that market forces are not working the way the IMF expects.

But is the Central Bank propping up the shilling? That we cannot be able to tell that easily. There are lots of moving parts. It can also be on account of some trading partners manipulating their currencies: China, for example, is regularly accused of maintaining an artificially weak currency. China has a big weight in our REER and it’s been growing over time.

The ultimate question is whether it is sustainable. There are two parts to this, financial and economic. The widening trade deficit has been plugged by remittances and portfolio inflows (money flowing into the stock exchange and government securities), not all of it honest money, and lately, government commercial borrowing, the ubiquitous eurobonds and syndicated loans. As long as these keep flowing, the show can go on.

Why are we told the economy is growing and yet we cannot feel it? This is the shopping mall economy. How long can we keep that going?

The economics is a different story. This is the shopping mall economy. It is not good for employment and equity. It is not good for employment, or equity, or sustainable growth. It is part of the answer to the question that Kenyans keep asking: why they are told the economy is growing and they are not feeling it. This is the shopping mall economy. How long can we keep that going? Your guess is as good as mine. Governments are known to manipulate currencies and to distort financial markets generally. The IMF is known to (a) have more faith in market forces than warranted and (b) get the workings of those market forces wrong. What to do?

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

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What Is Trump’s Only Redemption? That He’s an Utter Coward

There is an element to Trump that is almost tragic if he were not such a buffoon. What happens if the next Trump is just mad and brave enough to really commit and go all the way?

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What Is Trump’s Only Redemption? That He’s an Utter Coward
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Consider something for a second: how severe could things have gotten, both in America and globally, if Trump weren’t an utter coward?

I can already hear the murmurs of dissent: “How can he be a coward? Trump just tried to overthrow the US government on live television!” Yes, that is entirely true — and yet he didn’t. The entire tenure of his administration seems to have been a series of near misses; flirting with dangerous ideas and flitting back under the umbrella of normalcy just before the precipice. Every disaster that he helped to foist on the world could have been exponentially worse — if only he had been as committed to being the strongman he always boasted to be.

He isn’t. He’s a little daddy’s boy, a frightened man-child who doesn’t have the courage to follow through on the bull he himself spouts in front of adoring supporters. He’s an entitled, rich, spoilt moron and always has been. For all the bluster, when the chips are down, he’s quick to back off. Remember that boastful kid in primary school who was probably dropped off in his family’s C-Class Mercedes and looked down on everyone within insulting distance? He’d puff himself up and spit on others, until one day someone slapped the hell out of him. Upon getting struck, and family power no longer mattering, it became apparent that he didn’t even know how to throw a punch. That’s Trump in a nutshell. But Trump was also the gleeful little sociopath who led the charge in starting a fire only to have it pointed out there could be consequences without Daddy around. Learning of possible repercussions, he was the type to throw others quickly under the bus and backtrack from his own fomented chaos.

To be clear, in the last year especially, Trump absolutely could have gone horrifyingly further than he did. Could you imagine if Trump, the wannabe little dictator that he is, had the convictions (terrible though they are) of a Museveni or an Uhuru? It was within his power to do so, but he kept pulling back. Take for instance the Black Lives Matter movement across the United States in the summer of 2020. Yes, there was horrible police violence, clashes amongst protesters, chaos and destitution. In the midst of all of those charred buildings and the all-pervasive sense of loss in Minneapolis (the city where George Floyd was executed by police), I had a feeling I could not quite shake off as masked marchers swarmed in the streets around me: couldn’t this have been so much worse? To be clear, there absolutely could have been martial law declared but all those Trumpian threats of militarising entire cities never fully materialised beyond a handful of arrests by unidentified officers of questionable loyalties.

Sure, all these things are a horror and an affront to “Western society”. We get it. But all things are relative in politics so imagine if Uhuru had been in Trump’s shoes. Kagame calling the shots. Museveni. What would have happened? Experience tells me that those ugly bruises and lost eyes from rubber bullets would have needed body bags; the amount of live ammunition used would have been innumerable, and the scale of the tragedy would have been of unheard of proportions. Ask a Kenyan university student how their protests tend to wind up; talk to a random Kampala youth about how things shook out a couple weeks after the presidential election. If you can manage to find one, talk to an opposition leader in Rwanda. If there are any brave enough to filter back into Burundi, ask anyone involved in the coup attempt against Nkurunziza a few years back. The point here isn’t to give undue credit to tyrants, but merely to point out that things can always be drastically worse.

What happened in November of 2020 in Kampala? Protests at the arrest of Bobi Wine were met with such utter brutality it was incredible that anyone would dare stick their head out. Officially 54 people were killed but there are claims that the real death toll is in fact far higher. Take the days after the Kenyan re-election of Uhuru Kenyatta back in 2017, when there seemed to be a sort of suspension of what was to come next as the election drama unfolded and the cops came down hard on Kawangware and Kibera. That’s what being a totalitarian looks like. It is cops firing on crowds, social media shutdowns and mass power cuts. Looking back years from now, the reality will prevail that Trump could easily have gone there but didn’t.

That is the essence of Trump, absolutely having the power to be a world-class dictator, but lacking the organisational skills, intelligence, or conviction to jump in all the way. He always dips his toe in at the deep end, but never dives. The waters of reality are always a bit too cold for him, the soup just a bit too hot for his liking. His legacy will be one of having half-assed it in all aspects of his administration, from fascism to COVID-19 vaccine rollouts. I don’t think that it is any real stretch to look at him and state plainly that he’s just too cowardly to really accomplish anything that he aspires to. While Sevo cranks out press-ups on state television, Trump has spent his time cranking out tweets in between bites of “quarter-pounder” cheeseburgers from the comfort of his own bed.

Of course, the Western media will not countenance such comparisons, let alone acknowledge how much worse the situation could have easily become at the US Capitol last January 6th. For the American media, this is (rightly) a major blow to US democracy, but (wrongly) the single worst thing that could have happened. For instance, what if just two more of the thousands of protesters had discharged the firearms they were carrying inside that crowded Capitol Building? What if the pipe bombs planted near the Democratic National Committee and Republican National Committee buildings had exploded? What if the mob had wedged its way into the chambers of the Senate and the House quickly enough to get their hands on members of congress? And what if Trump himself had not backed off and sent out a tepid message to his supporters at the 11th hour?

Think about this: in coup d’état terms, the Trump mob had pulled it off. They had taken the single most important government building in the US and had done so quite easily. Their flags were draped from balconies and their cronies were climbing the ramparts to continue streaming through the doors. They took the seat of government and, for a brief period during the process of transitioning power, successfully interrupted the proceedings and forced all the democratically elected members of congress to scurry into the labyrinth of subterranean tunnels below the Capitol Building to save their very lives. That is a coup. A successful one at that. For one committed to following through on his calls to overthrow the government, this would be a crowning achievement.

Picture this: if three years ago Raila Odinga had called on his supporters to storm State House, and they had successfully done so while Uhuru’s re-election  was being certified, forcing members of parliament to flee in their government-issue Prados, what would that be called? I know what the Western media would have said about it, that it is another sad story of a developing country in Africa that just could not get over the hump of real democracy. There probably would have been some backroom deals with international powers, and an intervention from all those British troops that hold the base up on Mount Kenya may not have been entirely out of the question. Perhaps Raila is the most eloquent example as he does have a bit of a track record of stirring up his supporters after controversial elections then backing down “for the sake of the country” after chaos has already erupted.

The coup was complete but Trump pulled out of it quicker than from his marriage to a wife turning 40. Why? Could it be that it is only when his advisors managed to get his ear during cable news commercial breaks that he realised that he might drown in the madness? I for one certainly think so. When he realised that there would be consequences for his little civil war charade, Trump felt what he always feels — fear. Trump didn’t realise there could be ramifications for what he was doing until someone (not named Mike Pence) put the fear deep into him. He backed off, and American democracy continues shakily on into an uncertain future

Now there actually might be consequences — legal ones at that. Banks are cutting ties and media partnerships are being snuffed out in rapid succession. Some Republicans are now actively jumping ship, others have deflected blame or finally acknowledged that there is a central symptom to the American political condition. It is too little, too late of course, and the task of getting Americans locked in a tribal political death embrace to try not to strangle each other is now firmly in the hands of centrist Democrats who may not actually follow through on the massive economic recovery needed for the citizens of the US to survive the coronavirus pandemic and the resulting economic disaster. Is the US still the preeminent superpower as the Trump administration takes the exit? Yes, unfortunately it is. Imperialism is still alive and well, and frankly could have weighed way more heavily on the global community over the last four years.

A lingering question remains, one that hangs like a suspended piano over the heads of the Democratic establishment: what or who will come along next? It is obvious that the cat has been let out of the dark ethers of conservatism for a while now; just how much has that cohort been emboldened? It is a question that I have asked before, but now as flags were draped on the smoldering fences that were brought down around the US Capitol, the core of the issue remains; what happens if the next Trump is just mad and brave enough to really commit and go all the way? There is an element to Trump that is almost tragic if he were not such a showman; he evoked something amongst a huge swath of the public consciousness, only for it to prove illusory for Trump never understood what he had within his grasp in the first place.

Whoever comes next might just push the boundaries further out, might commit to striking Iran, take concentration camps for immigrants to a greater extreme, declare martial law and put armed troops in the streets with a standing “shoot to kill” order. Someone who might take measures to outlaw efforts to combat global warming and do all of this without batting an eyelid or seeing any reason to back down. The part of the iceberg that sunk the Titanic wasn’t what was visible, but the larger mass just below the surface and out of sight. To put it bluntly, next time the United States might not be pulled back from the brink by cowardice.

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

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

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

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

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

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

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

This was not the case in 2017.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Uganda: Democracy for Some, Mere Management for Others

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Those are the boss’ options.

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

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