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Charities, Voluntourism and Child Abuse: Is There a Link?

8 min read. The recent case of children dying at a feeding centre in Uganda has once again highlighted the issue of whether “voluntourists” and children’s charities operating in Africa are doing more harm than good. RASNA WARAH explains why volunteers and non-profits working in poor countries need to be monitored and vetted more closely.

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Last year I wrote about Katie Meyler, a young American woman who set up an educational charity called More Than Me that ran a school for girls in Liberia and which became the site of sexual abuse perpetrated by one of its founders. It turned out that Meyler had no academic qualifications for teaching and her school, like many foreign NGOs and charities operating in Africa, was not sufficiently monitored by the Liberian authorities. It was only when a Liberian nurse at the school reported cases of sexually transmitted diseases, including HIV, among the students that the authorities took notice and when it became apparent that the girls in the school were being routinely raped by Meyler’s close friend, a Liberian man who recruited the girls from Monrovia’s poorest slums.

Now a similar case has emerged in Uganda. The case of Renee Bach has once again highlighted the dangers of allowing unregulated foreign charities to operate in poor countries. Bach’s case might never have received media attention if two Ugandan women had not sued her and her religious non-profit organisation, Serving His Children, which was ostensibly set up to feed malnourished Ugandan children. Gimbo Zubeda and Kakai Annet claim that their sons died as a result of having been “treated” at the Serving His Children feeding centre in Masese, Jinja. They are suing Bach for negligence.

Zubeda’s and Annet’s children were not the only ones who died at the feeding centre. Between 2010 and 2015, some 105 children died there, according to Bach’s own admission. Medics who have commented on the case say that many of these children were not just malnourished; they also suffered from other acute illnesses that Bach’s centre could neither diagnose nor treat properly. They died because there was no trained medical practitioner at the centre who could either prescribe the right medicine or refer the children to another facility.

What is most astonishing about this case is that Bach apparently passed herself off as a doctor even though she had no medical training. And despite having no credentials to run a feeding programme for severely malnourished children, she managed, like Meyler, to raise hundreds of thousands of dollars from donors in the United States who believed that she was saving African lives.

Orphanage tourism

Like many young naïve white volunteers who come to Africa and then decide to stay – and fund their stay by forming a charity – Bach arrived in Uganda as an 18-year-old volunteer. Two years later, in 2009, this young American women from Virginia registered an NGO in her home state that claimed to provide welfare to the needy and which also engaged in some Christian evangelism on the side. The area in Jinja where she set up her charity has high levels of illiteracy, particularly among women, and high levels of child malnutrition. This combination allowed her to hoodwink the local population and to pass herself off as a medical practitioner.

This particular initiative, which had deadly consequences, has once again raised the question of whether Africa needs more foreign charities and NGOs, and whether there is a direct link between what is often referred to as “voluntourism” and child abuse.

There is a growing awareness of the dangers of young volunteers from the West working for short periods of time in orphanages in poor parts of the world – in essence combining tourism with volunteer work. It appears that the number of orphanages in poor countries is growing in proportion to the number of volunteers. “Orphanage tourism” has now become a business, with tourists and volunteers paying large amounts of money to have an “orphanage experience”. One study in Cambodia found that the number of orphanages in the country had increased by 75 per cent between 2005 and 2010 even though the number of children without parents had declined; the majority of these orphanages were in tourist areas.

Parents or caregivers who give up their children to many of these orphanages are promised better education for the children but very often the children are kept in poor conditions to attract donor funding. This also seems to be the case with local charities run by individuals or which are funded by the government. Recently, a famous children’s home in Nairobi named after Kenya’s first First Lady was criticised for mistreating children under its care.

Many children are, in fact, actively recruited into orphanages to meet the demand of tourists, donors and volunteers – a phenomenon defined as “orphanage trafficking”. Sometimes one can accurately gauge the level of poverty in an area by the number of charities (especially orphanages) there. I once counted five orphanages in the short stretch between Malindi and Watamu, a tourist destination in Kenya that is known for both its high levels of poverty and its beautiful beaches. Is it possible that so many children in this part of Kenya’s coastal region have no parents? I seriously doubt it.

Children’s rights advocates have pointed out the lack of background checks on volunteers and say that the lack of child protection policies in many countries places vulnerable children at the risk of being sexually abused or trafficked by both locals and foreigners. Orphanages allow paedophiles claiming to be volunteers easy access to children.

Mythomaniacs

Many critics of the aid industry say that aid is not so much about making the aid recipient’s life better, but more about making the donor feel good about him or herself. That is why so many young white women, looking for adventure or redemption – or both – like Bach and Meyler, come to Africa when they could be helping poor or underprivileged communities in their own neighbourhoods back home.

The Nigerian-American writer Teju Cole dubbed this phenomenon “The White Saviour Industrial Complex”, which he says is not about justice but about having “a big emotional experience that validates privilege”. In an article published in The Atlantic in March 2012, Cole wrote: “Africa has provided a space onto which white egos can be conveniently projected. It is a liberated space in which the usual rules do not apply: a nobody from America or Europe can go to Africa and become a godlike saviour or, at the very least, have his or her emotional needs satisfied.”

And the writer Paul Theroux observed, “Because Africa seems unfinished and so different from the rest of the world, a landscape on which a person can sketch a new personality, it attracts mythomaniacs.”

Why come all the way to Africa when you could be helping your own people? Well, one reason is that it’s easier for a person in the United States to set up a charity claiming to be helping Africans in a country that a donor might never visit than it is to set up a non-profit for homeless people or drug addicts in your own neighbourhood, which might be monitored more closely by the authorities. Such monitoring and oversight is lacking in most African countries, especially countries that are experiencing conflict or natural disaster.

Secondly, it is easier to get away with all kinds of malpractices in Africa if you are white. Being white guarantees immunity from scrutiny. The women who came to Bach’s feeding centre referred to her as “doctor” simply because she was white. Iris Martor, the nurse who worked at the More Than Me Academy in Monrovia explained how white privilege allowed Meyler to get away with things that would have not been tolerated if she had been a black Liberian. “They think we are stupid, with little or no education, and our system is fragile, and they can get away with things because their skin is white,” she said.

Then there is the huge power imbalance. My friend Lara Pawson, a former BBC journalist, says that when she worked as a foreign correspondent in Africa she rarely saw white people treating Africans as equals. This is partly the Africans’ fault. White people in most former colonies in Africa are still treated like gods. They get the best tables at restaurants and are treated with utmost respect in public spaces. Just being white is enough to guarantee you various privileges.

And when they arrive here, they find that their standard of living improves considerably. A working class white kid from the wrong side of the tracks in Philadelphia or London will find that her UN or NGO job (which she got purely on the basis of skin colour) can afford her a big house in the nicest neighbourhoods – plus cooks and chauffeurs. Who would not want to live in Africa?

What no one asks is why we need a 20-something from Philadelphia to help us with problems that we should be solving ourselves.

The aid myth

Some of the fiercest critics of the aid industry have been from the African continent. Dambisa Moyo’s Dead Aid became a bestseller because she debunked the myth that aid benefits the poor. The Kenyan columnist Sunny Bindra has talked of how aid dependency erodes people’s dignity and self-respect. Maina Mwangi had called aid a “blunt instrument”. The Tanzanian scholar Issa Shivji has argued that when donors come to an African country, they establish a neoliberal agenda that essentially wrenches policy-making out of the hands of the African state. He says that the rapid rise of NGOs in Africa is part of a neoliberal offensive where the African state is demonised and the NGO is celebrated. Firoze Manji has often accused NGOs of “depoliticising poverty” by casting poverty, rather than social injustice, as the main problem facing so-called developing countries. Once poverty is depoliticised, it is delinked from the real causes of poverty – including corruption and exploitation of African resources by foreign multinationals. (You can read their brilliant essays on this topic in Missionaries, Mercenaries and Misfits, an anthology I edited.)

With so much opposition to aid by none other than Africans, why is it that these NGOs and charities keep coming to Africa? Well, it’s partly because we let them. African governments are only too happy to let charities and NGOs do the work that they should ideally be doing. And if the NGO or charity is run by a white person, all the better because not only will donor funds be guaranteed, but the government will also save its own resources (which can then be diverted to personal projects or can be embezzled).

How do we extricate ourselves from these do-gooders? Well, for one, by putting in place more stringent measures to vet and monitor them. The More Than Me Academy in Liberia had American teachers and volunteers with no experience in education. Both Bach’s and Meyler’s charities did not have boards that were located in the country where their NGOs were operating, which meant that there wasn’t sufficient oversight of their operations. Government inspectors did not come to the Meyler’s school or to Bach’s feeding centre to see if they met the required standards. No one was watching, so the abuse continued.

More importantly, African countries need to wean themselves off aid. NGOs can never replace governments when it comes to providing basic services – they simply do not have the mandate or the kind of resources to undertake service provision on a national scale. Only a government, or its agencies, can provide universal healthcare and education. Only a government can pass laws, regulations and oversight mechanisms that can ensure that NGOs are accountable to the people they purport to serve.

This is not to say that African governments can be relied on to do what is best for their citizens or to do what is in the public interest (as we in Kenya know too well) but to leave entire populations at the mercy of foreign charities and NGOs that are not accountable to anyone is highly irresponsible – and can be extremely dangerous, as the cases in Uganda and Liberia illustrate.

I don’t think all charities and donor organisations are doing harm; on the contrary, many have been crucial during emergency situations. But I do think that there must be more scrutiny of their operations and of their founders’ intentions. African countries should not be fulfilling the misplaced fantasies of naïve and confused white men and women who come to the continent to find themselves, and in the process end up harming those they claim to be helping.

Many countries are now waking up to the risks posed by voluntourism, especially as they relate to children’s charities and orphanages. Last year, Australia became the first country to recognise “orphanage trafficking” as a form of modern slavery. African countries should do the same.

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Ms Warah, the author of War Crimes, a sweeping indictment of foreign meddling in Somalia, and A Triple Heritage, among several other books, is also a freelance journalist based in Malindi, Kenya.

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No Country for Muslims? Modi Underestimated Indians’ Tolerance for Diversity

7 min read. What India’s Prime Minister forgets – and what the mass protests in Indian cities demonstrate – is that India’s secularist democracy has survived more than 70 years because Indians decided that religion was too personal and too precious to be left to the whims of the state.

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No Country for Muslims? Modi Underestimated Indians’ Tolerance for Diversity
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Just before Christmas, when thousands of Indians – both Hindus and Muslims – were protesting against a controversial new law that discriminates against Muslims, a court in Pakistan handed down the death sentence to Junaid Hafeez, a 33-year-old university professor who was found guilty of blasphemy. Hafeez had been accused of posting derogatory comments about the Prophet Mohammed on social media. His case is one among many in Pakistan where harsh sentences have been handed out to those perceived to be insulting Islam.

That same week, a court in the Kingdom of Saudi Arabia – Islam’s holiest land – sentenced five men to death for the murder of the journalist Jamal Khashoggi. Critics believe that the trial was a farce and the real perpetrators of the crime, including Saudi Prince Mohamed bin Salman, have got away scot-free. Khashoggi’s brutal murder in a Saudi consulate in Istanbul in October 2018 shocked the world and led many to point fingers at the repressive Saudi monarchy, which is known to torture and detain those opposed to it – and which seems to suffer no consequences for its inhumane treatment of dissidents, not even from Western nations that advocate democratic ideals to the rest of the world

There were no mass protests or riots in either Pakistan or Saudi Arabia – or even outside these countries – against what are undoubtedly flawed and extremely unfair justice systems. On the contrary, the Trump administration congratulated Saudi Arabia for the verdict against Khashoggi’s alleged killers, thereby whitewashing what was clearly a miscarriage of justice.

So the fact that Indians of all religions have risen against the Citizenship Amendment Act (CAA) is perhaps on indication of how resilient India’s democracy and secularist traditions are. The CAA is being opposed because it allows Hindus, Sikhs, Christians, Jains and Parsees who are in India illegally to acquire Indian citizenship if they can prove that they are being persecuted in Bangladesh, Pakistan or Afghanistan, all of which are predominantly Muslim countries. This privilege, however, is not extended to Muslims from these countries. This is viewed by many as grossly discriminatory and contrary to India’s constitution, which was founded on the principle that religion should not determine citizenship.

At least 25 people have been killed by security forces since the protests began, but Prime Minister Narendra Modi has shown no signs of reconsidering the wisdom of the Act; on the contrary he has become more defiant. This could be because, like Donald Trump, he believes he has a strong base that will support him and his policies no matter what. But that base, it seems, is crumbling in Modi’s case. The protests have not stopped; on the contrary, they are getting louder.

Moral high ground

Since independence in 1947, India has prided itself for not being like its neighbour Pakistan, which insisted on forming an independent state for India’s Muslims rather than being part of a united India where both Hindus and Muslims could co-habit peacefully. India held the moral high ground with respect to its neighbour, often boasting that despite being a Hindu-majority country, it had no issue with its sizeable Muslim minority. (There are currently roughly 200 million Muslims in India – almost the same number as the total population of Pakistan.) In fact, until Narendra Modi’s right-wing Hindu nationalist party took over in 2014, successive Indian governments have made it a point to woo and accommodate the nation’s Muslims.

The fact that Hindus in India are fighting to preserve Muslims’ rights is itself a testament to Indians’ tolerance and maturity – even among those who have historical grievances against the Muslim community. Although Muslims have lived in India before the advent of the Mughal Empire, which ruled over India from the 16th century to the mid-18th century, the Islamicisation of India is often attributed to the Mughal invaders/conquerors and their proselytising mission.

There is no doubt that Mughal culture has contributed enormously to the arts, architecture, culture and cuisine of India. Architectural marvels like the Taj Mahal, biriyani, kebabs, and the Urdu language are a legacy of India’s Mughal/Muslim heritage. But the Mughal Empire (which lost power after the East India Company and later the British Empire controlled large swathes of India) is also associated with atrocities, including forced conversions, which India’s Sikhs are acutely aware of as their religion is founded partly on resistance to Mughal hegemony.

Although Sikhism is often viewed as a reaction against Hinduism’s stifling and oppressive caste system, and its first guru, Nanak Devji, is remembered for fusing Islam with Hinduism, thereby creating a monotheistic religion that shunned the worship of gods and goddesses and that bequeathed more rights to women, Sikhs’ resistance to Islam has come to define their religion.

Distrust of Muslims is an instinct that is inculcated in Sikhs and Hindus from childhood, much like the way Kikuyus are taught to distrust Luos. When I was a child, my grandmother reminded me that many Sikh gurus, such as Guru Tegh Bahadur, were tortured or put to death by Mughal emperors for resisting forced conversions to Islam. The sons of Sikhism’s last guru, Govind Singh, were buried alive by the sadistic Emperor Aurangzeb in the late 17th century. Govind Singh formed the “Khalsa” (a militant group of disciples) to wage war against the Muslim rulers.

Northern India’s Sikhs and Hindus thus have an instinctive fear of Muslims that is based on a history where they – not the Muslim/Mughal invading armies – were the persecuted ones, a fact that neither the left nor the right in India is comfortable addressing, but which Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) have cynically tapped into.

What is happening in India is not your garden variety Islamophobia that emerged after 9/11 but a much deeper instinctive reaction that has its roots in Indian history. While the Mughal period in India is often seen as a golden age when beautiful buildings, poetry, dance forms such as kathak and other fine arts flourished, it is also viewed as a period of intense violence and cruelty. While Mughal emperors like Akbar the Great (who married a Hindu woman) are lauded for fostering harmony between the sub-continent’s largely Hindu population and the Muslim rulers, the atrocities committed by some Mughal emperors has also marred their reign. These atrocities shaped the formation of religions like Sikhism. Yet, the Sikh community’s religious leaders were among the first to oppose the CAA.

A “pure” India

The violence that characterised the Mughal Empire, especially in the 17th century, was reenacted again in 1947 when India attained independence and when millions died or were displaced when the new country Pakistan was born and the Indian subcontinent was partitioned. My ancestral family home in Lahore became part of Pakistan. This is a wound that my great grandparents and grandparents harboured for years.

And yet, India’s Muslims who did not cross the border to live in Pakistan in 1947 have rarely felt like they do not belong to India. Hindu temples sit comfortably next to mosques in most Indian cities as do cathedrals and synagogues. That was the beauty of India…until Modi came along, and told Hindus that India belongs to them and them only.

Modi and his BJP party exploited Hindus’ instinctive distrust of Muslims. The Rashtriya Swayamsevak Sangh (RSS), a militant Hindu organisation formed in 1925 and which Modi belongs to, has an agenda to “purify” India, much like Adolf Hitler sought to “cleanse” Germany. In the 1940s, as World War II was raging in Europe, the RSS leader MS Golwalker spoke of an exclusively Hindu nation: “Ever since that evil day, when Moslems first landed in Hindustan [India], right up to the present moment, the Hindu Nation has been gallantly fighting to take on these despoilers. In Hindustan, land of the Hindus lives and should live the Hindu Nation…”

He then went on to extol the virtues of Nazism: “To keep up the purity of its race and culture, Germany shocked the world by her purging the country of the Semitic races – the Jews. Race pride at its highest has been manifested here, a good lesson for us in Hindustan to learn and profit by.”

In January 1948, five months after India’s independence, Nathuram Godse, a member of the RSS, assassinated Mohandas (Mahatma) Gandhi, who the RSS viewed as being sympathetic towards Muslims.

In an article published in The Caravan and adapted from a lecture she gave in New York last year just before the protests in India began, the Indian activist and writer Arundhati Roy stated:

If Nazi Germany was a country seeking to impose its imagination onto a continent (and beyond), the impetus of an RSS-ruled India is, in a sense, the opposite. Here is a continent seeking to shrink itself into a country. Not even a country, but a province. A primitive, ethno-religious province…That it will self-destruct is not in doubt. The question is what else, who else and how much else will go down with it.”

To understand the depths of Modi’s fascist tendencies, we need not go very far in time. In the six years he has been Prime Minister, he has taken the country down a path that will not go down well in history.

A few recent examples: In November last year, Modi’s government revoked the overseas citizenship of journalist Aatish Taseer on the pretext that Taseer’s father was a Pakistani. Taseer, who grew up in India with his Sikh mother, but who is now a British citizen, had written a cover story in May 2019 for TIME magazine that described Modi as “India’s Divider In Chief”. The revocation of his overseas citizenship (which is extended to individuals who can prove that they have Indian ancestry or who once held Indian citizenship, and which allows one to travel visa-free to India) was clearly an act of retaliation by a leader who does not take criticism lightly.

In August 2019, Modi’s government annexed Jammu and Kashmir by repealing Section 35A of the Indian constitution, which gave the former princely state semi-autonomous status. This act was viewed by the state’s Muslim majority as a direct attack on them and their territory, akin to what Vladimir Putin did in Crimea. Jammu and Kashmir has been a front line state caught between the crossfire between Indian and Pakistani armies for years. The current and previous governments have often viewed it as harbouring terrorists sympathetic to Pakistan, even though the residents have argued that they have no desire to be part of either India or Pakistan.

Violence against Muslims has also risen under Modi’s regime. According to news reports, more than a hundred Muslims have been killed by Hindu mobs since 2015.

What Modi forgets – and what the mass protests in Indian cities demonstrate – is that India’s secularist democracy has survived more than 70 years because Indians decided that religion was too personal and too precious to be left to the whims of the state. Most Indians recognise that their country’s strength lies in its religious and cultural diversity. If India had gone the Pakistan way, there would be rivers of blood everywhere, like those that flooded the India-Pakistan border at independence when Muslims, Hindus and Sikhs crossing the border were slaughtered in the hundreds of thousands in revenge attacks. Few Indians want to go down that road again.

What Modi and his government have done may appeal to the anti-Muslim instincts of India’s non-Muslim majority, but it goes against the grain of how Indians (except members of the RSS and its offspring the BJP) perceive themselves and their country. With economic growth rates sharply dropping in India currently, it is only a matter of time before the protestors’ anger against the government’s anti-Muslim stance turns into widespread disaffection.

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Of Tigers, Debt Merchants and 2020 Vision

8 min read. The former president of the African Development Bank, Donald Kaberuka, has dismissed as “nonsensical” any suggestion that Africa may have over-borrowed, saying instead that with better debt management and higher domestic revenue mobilisation, the continent can take on more debt. But Kaberuka fails to make the link between the increased borrowing and the revenue problem.

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Of Tigers, Debt Merchants and 2020 Vision
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The public debt burden has dominated economic debate in 2019. Public debt is likely to be even more topical in 2020, both domestically and globally. As at end November 2019, 31 out of 70 countries in the IMF’s roster of low-income countries are listed as either in or at high risk of debt distress. Another 26 are listed as being at moderate risk, leaving only 13 that are still at low risk. Last week, the IMF approved a $2.9b bailout for Ethiopia, one of the high distress risk countries.

I first called out the Jubilee administration’s borrowing binge six years ago. Up until two years ago, the IMF and the World Bank were still giving it the thumbs up. (Very often we forget that these institutions are lenders and therefore conflicted on matters debt.) A few weeks ago Donald Kaberuka, the immediate former president of the African Development Bank (AfDB) and erstwhile Finance Minister of Rwanda, dismissed as “nonsensical” any suggestion that Africa may have over-borrowed:

“The idea that Africa is drowning in debt is nonsensical . . . If we can improve on our own domestic revenue mobilization, if we can improve on our public debt management and if we can improve on our debt management capabilities, the continent is able to take a bit more debt, especially at this time when the markets are looking for yield.”

This is an interesting argument. You may also have heard it from the Jubilee administration—the problem is not too much debt; it is the Kenya Revenue Authority (KRA) that is failing to meet revenue targets.

Kaberuka, who I gather is an economist, wittingly or otherwise, fails to make the connection between the borrowing binge and the revenue problem. Only a most incurious economist would look at revenue and debt trends such as ours (see chart) and conclude that they are completely unconnected. Although I have written about the connection on more than one occasion, it is worth recapping. There are two dimensions to the connection: an accounting one and an economic one.

Let’s start with the accounting. Let’s say we start with a GDP of Sh10 trillion which is 80 per cent private economy and 20 per cent government. Let’s then say the government is raising Sh2 trillion, which is 20 per cent of GDP, in tax revenue. Suppose the government goes to China and buys a railway worth Sh500 billion on credit. The GDP will now be Sh10.5 trillion. We will be told that the economy has grown by 5 per cent. But the railway has not added anything to the economy, and nor is it paying tax, so the government still collects Sh2 trillion, but which is now 19 per cent of the Sh10.5 trillion GDP. If this is repeated every year, by year five, the GDP will have expanded to Sh12.8 trillion and the tax revenue-to-GDP ratio will be down to 15.7 per cent.

This is a purely accounting view, which assumes that government investment is neutral, neither helping nor harming the economy. This is not as far-fetched as it might at first appear. For example, it could simply reflect government investments with long gestation periods. Indeed, we have been told that the new Standard Gauge Railway (SGR) is one such long-term visionary project whose benefits will be realised by our grandchildren. But for no harm to occur, two conditions need to obtain. First, all the borrowing needs to be foreign. Use of domestic resources means diverting these from the private economy, and that is harmful. We call this crowding out. Second, there are no repayments, because repayment of foreign debt amounts to sucking money out of the economy, also harmful. Neither obtains.

Let us start with repayments. This year, we have budgeted to pay Sh139 billion ($1.39 billion) in foreign interest, a tenfold-plus increase from Sh11b ($130m) in the 2012-2013 financial year, the last year of the Grand National Coalition government. And this does not include the hefty payments of the principal on the SGR loans that kicked in this year. The use of domestic resources is also a very significant factor. Half the debt that the Jubilee administration has accumulated is domestic. The crowding out extends beyond credit. With so much money to spend liberally, trading with the government becomes the most profitable business, diverting other economic services away from, and inflating the costs for the private sector. This could not be better demonstrated than by the case of Kenya’s banking industry.

Chart 2Last year, the industry made a consolidated profit of Sh110b, and Sh119b in interest from government securities. Considering that lending to government is virtually costless and risk-free, this implies that banks made all their profits from the government, and lost Sh9b on the business they did with the rest of the economy. The contribution of interest on government securities has increased steadily from 37 per cent in 2013 to 108 per cent in 2018 (see chart). But we also see that the banks’ profitability has declined. Profits declined by 40 per cent in 2017, following the capping of interest rates in late 2016. In 2018 profits were 14 per cent lower than in 2013. If banks are not making money from the private economy, it stands to reason that government revenue will also take a hit.

How much public debt is too much?

Debt experts have sophisticated models that are supposed to tell us. These models are built around “present value.” Present value is the sum of a forecast, such as a cash flow, and in this case annual debt repayments, discounted by a rate of interest or other relevant discount factor, used to give an estimate of current worth. If two similar countries borrow the same amount of money on similar terms, one invests wisely, and the other plunders it all, the net present value of the debt will be the same. It should not surprise then that the IMF’s models were giving the Jubilee borrowing binge the thumbs-up even as the Eurobond went walkabout and one Josephine Kabura was mocking us with tall tales of cash stuffed in gunny bags.

Chart 3For the financial health of a country, a simple rule of thumb is to ensure that debt service does not grow faster than government revenue for too long. If the debt is invested productively, the investments expand the economy, the government generates more tax revenue from the expanding economy, which it then uses to service the debt. How long is too long? That is a matter of exercising sound judgement. As John Maynard Keynes famously quipped, in the long run, we are all dead. But the question becomes moot when the trend looks like what we see in the chart—debt service heading north, revenue heading south. You do not need present value calculations to see that this trend cannot go on for much longer. Sooner or later, something will have to give.

Expect to hear a lot about fiscal consolidation in 2020.

Fiscal consolidation is defined as policy measures that aim to reduce the deficit and stop the accumulation of debt. The substance of it is what we used to call structural adjustment but, following the 2007 financial crisis, it became necessary to invent a new name—it just wouldn’t do to speak of Spain, or the UK for that matter, as implementing structural adjustment.

A fiscal consolidation strategy is predicated on the expectation that governments can find ways of bringing down deficits without hurting growth. Budget deficits are, in essence, the pumping of money into the economy, which ought to stimulate growth. Conversely, fiscal consolidation amounts to withdrawing money from the economy, which would dampen growth. The problem is that economic slowdown hurts revenue, meaning that the government has to constrain expenditure even further to meet its deficit reduction targets.

The first strategy entails counteracting the contractionary effect of fiscal consolidation with expansionary monetary policy. Simply put, what the government takes away, the Central Bank puts back in circulation. The Central Bank has a couple of tools to do this, principally by buying bonds and lowering the cash ratio and liquidity requirements for the banks (the percentages of assets that banks are required to have in cash and near-cash assets such as Treasury bills and bonds). Shovelling money out of the door is also expected to reduce interest rates, which besides making borrowing attractive for businesses and consumers, can substantially lower the interest cost of domestic debt. But unlike fiscal stimulus where the government is the spender, monetary stimulus depends on market response. The policy makers hope the money will stimulate production, but it could just as well suck in imports, or leave the country to seek higher returns elsewhere, thereby depleting foreign exchange reserves and putting pressure on the currency.

The second strategy is to find “off-balance sheet” financing of public investment. The default alternative these days is the so-called public-private partnerships (PPPs). Simply put, PPPs are the public equivalent of equity financing. Instead of the government borrowing to build a hospital for instance, a private investor builds, and the government leases it. But PPPs have their drawbacks. First, to make them attractive to private investors, PPP projects are usually structured in such a way as to ensure that the investors cannot lose money—“de-risked” in financial lingo.

Second, PPPs are seldom commercially viable so, more often than not, the Government usually has to part-finance the project in order to achieve an attractive rate of return for investors. Third, PPP financing cherry picks projects with commercialisation potential, which typically will be projects that benefit more developed areas or better-off people in society. In economics, we call such policies “regressive”, meaning they transfer resources from the poor to the rich. Fourth, PPPs have a very high corruption risk—we need look no further than the stink that is the medical equipment leasing scheme known as the Managed Equipment Services (MES) project.

Another scheme is to shift debt and deficit financing from the national government’s books to quasi-government agencies, such as has recently been done by amending the law to allow the Kenya Roads Board (KRB) to issue bonds leveraged on the fuel levy revenues that are earmarked for road construction. Assuming an interest rate of, say, 12 per cent, each shilling of fuel levy revenue can be leveraged to borrow 8 shillings. Already, the KRB has published an expression of interest for transaction advisors to raise Sh150 billion. Suffice it to say that Greece used financial gymnastics of this nature to first be admitted into the Eurozone and to subsequently fake compliance.

PPPs have a very high corruption risk—we need look no further than the stink that is the medical equipment leasing scheme known as the Managed Equipment Services (MES) project

How much public finance does development require? There is perhaps no better place to benchmark than with the Asian Tigers.

Chart 4In the 70s, Thailand and South Korea were raising 13 and 15 per cent of GDP in tax revenue, well below Kenya’s 18 per cent, while Malaysia and Singapore were doing better at just over 20 per cent (see chart). But where the East Asians stand apart is that each of them was able to put at least a third of their revenue into investment. The real miracle here is how they managed to keep their recurrent budget to a maximum of 10 per cent of GDP, out of which they were also heavily investing in education. As economists Mahbub ul Haq and Khadija Haq observed, beneath the East Asian economic miracle lay an education miracle.

Chart 5It is also a miracle of public finance, specifically, public thrift. We hear a lot about the high saving and investment rate part of the story. What we do not hear about is the role of government in that story. In the early seventies, East Asian and African countries had similar national savings rates, but even then East Asian governments were contributing more to national saving and investment, although African governments’ contribution was also significant (see chart). A decade later, East Asian governments were still contributing over a third of national investment, while for African and other LDC governments this contribution fell to 11 and 6 per cent respectively. Consequently, we turned to foreign resources. By the early 80s, Africa was investing 20 per cent of GDP more than half of which was foreign-financed, while the East Asians were investing 30 per cent, 90 per cent of which was domestically financed.

In the 70s, Thailand and South Korea were raising 13 and 15 per cent of GDP in tax revenue, well below Kenya’s 18 per cent, while Malaysia and Singapore were doing better at just over 20 per cent

The East Asian experience is telling us that when people were too poor to save much, it is the government, and not foreign resources, that closed the gap between private savings and investment requirements. In economics, we postulate that saving is determined primarily by income, and investment by rate of return. As these public investments paid off, they boosted private income and consequently private saving. When countries save more, they need less, not more foreign resources to finance investment. Donald Kaberuka is telling us that we need to raise more revenue to enable us to borrow more. Is he ignorant or dishonest?

During his tenure, the AfDB became the lightning rod for infrastructure-led growth, a fallacy that this column has discussed before. In fact, the nonsensical comments echo sentiments in the AfDB’s 2018 Africa Economic Review, to wit:

“For much of the past two decades, the global economy has been characterised by excess savings in many advanced countries. Those savings could be channeled into financing profitable infrastructure projects in developing regions, especially Africa, to achieve the G20’s industrialisation goal. That this mutually profitable global transaction is not taking place is one of the biggest paradoxes of current times.”

You may want to note that the objective is to “meet the G20’s industrialisation goal.” The irrepressibly prescient Franz Fanon read in the tea leaves:

“The national bourgeoisie will be quite content with the role of the Western bourgeoisie’s business agent, and it will play its part without any complexes in a most dignified manner.”

And therein lies the rub.

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From the Handshake to the BBI Report, Hope to Disillusionment: My Side of the Story

9 min read. During the political standoff that followed the 2017 presidential election, the National Super Alliance (NASA) espoused a road map that would lead to a political settlement through the formation of a transitional government that would have spearheaded the process of building a national consensus on political reforms. But in place of a Jubilee-NASA institutional engagement came the Handshake, a commitment by Uhuru Kenyatta and Raila Odinga in their personal capacities, which has culminated in the recently released Building Bridges Initiative Report, an underwhelming document that underscores the failure of the two principals to deliver the new political dispensation they had promised.

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From the Handshake to the BBI Report, Hope to Disillusionment: My Side of the Story
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The much-anticipated release of the Building Bridges Initiative (BBI) report two weeks ago was to be the crescendo of the detente—popularly known as the Handshake—between Raila Odinga and Uhuru Kenyatta after the failed 2017 presidential election. It underwhelmed.

Soon after its release, the rumor mill put its cost at the very unlikely figure of Sh10 billion, which the pundits calculated to be a whopping Sh64 million for each of the 156 pages of the badly drafted, poorly edited rehash of existing documents. In a satirical column, literary scholar Evan Mwangi calls it a reflection of the “low intellectual capacity of the clowns in charge of our country’s affairs,” while Wandia Njoya, another literary scholar, calls it a declaration of war by the political elite on the people. Both Mwangi’s and Njoya’s reading of the political psychology of the report leads them to a similar conclusion—it is a cynical political fraud.

Mwangi: “The report’s aim is to discourage us from seeking fundamental political or social change by pretending to offer avenues for transformation. It suggests that we should continue assuaging demagogues among our political class, so unlike in 2007 they don’t burn us alive in churches, stoke ethnic violence in political rallies in the run-up to the polls, or organise retaliatory attacks by youths who would then be all snuffed out to cover up crimes against humanity.”

Njoya: “Statements from the government and those pundits that slavishly support it often trace the source of any disaster to the public—especially the victims—and to democracy. Government insiders and supporters portray the state as blameless, and fault Kenyans for wanting to participate democratically in the making of decisions that affect them, because by doing so, Kenyans put delays on the good work of the government. If every social challenge we face is caused by us, the people, then the response to the challenge must be to fix the behaviour, the values and the soul of the people. This “fix the people” approach to social problems is the very essence of the Building Bridges Initiative (BBI) document released by the government this week.”

A Swahili tabloid summarised BBI thus: “Ni msitu mpya, nyani ni wale wale.” (same monkeys, different forest). From the ivory tower to street level, the verdict is the same.

How did we get here?

In January 2018, three months into the 2017 presidential election standoff, it was rumored that the formation of a government was being delayed by behind-the-scenes power-sharing negotiations. The National Super Alliance (NASA) issued a statement and held a press conference to refute the suggestion, during which this columnist stated that:

“NASA is not interested in boardroom deals which have not delivered for Kenyans like the 2007 power sharing agreement. We don’t recognise this illegitimate government and we will not give it legitimacy . . . Our nation is deeply divided between two irreconcilable political values namely authoritarian rule and democracy. They (Jubilee) have in fact stated that a benevolent dictatorship is better than a democracy. The way out for the country is to embark on an urgent, honest and far reaching conversation sooner rather than later.”

The key words here are “boardroom deals.” Indeed, I recall belabouring the pledge by analogy, stating that NASA would not go into a “come-we-stay” marriage with Jubilee. Internally, we were developing a more elaborate negotiating strategy. Our preferred road map to a political settlement was a transitional government with a limited mandate, to be established by a constitutional instrument along the lines of the National Accord that established the Government of National Unity (GNU) after the 2007/8 failed election.

The transitional government would have spearheaded the process of building a national consensus on political reforms that would have culminated in what we hoped would be an uncontested constitutional amendment referendum, if one were required, followed by a free and fair election. We had also suggested that Uhuru and Raila commit publicly to retiring, so as to strengthen their hand as honest brokers and the midwives of a new political dispensation, and by so doing, insulate the process from succession politics. This was a reasonable proposition since Uhuru would be retiring anyway, and Raila had signed a one-term deal with the NASA co-principals.

Our preferred road map to a political settlement was a transitional government with a limited mandate, to be established by a constitutional instrument

It therefore came as a bit of shock that Raila had gone ahead and cut a backroom deal with Uhuru, the very thing we had pledged not to do. But in the rough and tumble of politics, you learn to roll with the punches. We saw that the letter of the deal was in the spirit of the road map we envisaged, the main difference being that in place of the Jubilee-NASA institutional engagement we had prepared for, the handshake was a commitment by Raila and Uhuru in their personal capacities. In what was to be our last press release as the People’s Assembly Committee, we applauded this commitment but also pointed out the dangers:

“The memorandum is an initiative of the two leaders in their individual capacities. In the memorandum, they describe themselves not as presidents or leaders of political formations which they are, but as friends and compatriots. The two leaders have acknowledged the historical origins of our current crisis, and the many opportunities over the years that leaders have missed to right the ship. They recognise that they too have a historic opportunity to set the country on the right course, and they do not want to be remembered as another generation of leaders that did not rise to the occasion…We must commend and congratulate the two leaders for this meeting of minds. Acknowledging a problem is the first step towards solving it. The two leaders have asked us to give them an opportunity to spearhead this process. We have been assured that this initiative will be about the people, will involve the people, and will be validated and owned by the people. But we are alive to the painful history of political betrayal. We know that once [crises] subside, leaders can get comfortable and allow the issues of the people to fade into the background. That is how we have ended up where we are.”

This was the spirit as we set about implementing the handshake. But as days went by, it became evident that what was said was not what was intended. The discordance was brought into sharp relief by disagreements on whether or not to gazette the BBI Task Force. The handshake MOU was explicit that the initiative was a personal political undertaking. Gazetting the task force would make it a state project that would be bureaucratised and watered down. And as one colleague opined, it would amount to “kicking the ball into the long grass.” Those pushing for gazettement could not argue a cogent case, but in one conversation, one colleague, in a fit of exasperation, blurted out: “But there is money!”. The cat was out of the bag.

In the corridors, the conversation was dominated by talk of an impending cabinet reshuffle. Indeed, within no time at all, Raila Odinga’s Capitol Hill office had become a beehive of activity with, so I gathered, people bringing their CVs, others seeking help with tenders, pending bills and corruption cases. By end April, the frenzy had reached fever pitch. Week after week, confident predictions were made that the reshuffle would be announced on Thursday, then Monday, then Thursday again. My vehement protestations about these under-the-table dealings elicited a quiet word of advice that I should tone down as my name was on the appointments list.

We had also suggested that Uhuru and Raila commit publicly to retiring, so as to strengthen their hand as honest brokers and the midwives of a new political dispensation

There were two other issues that I found troublesome. The first was the anti-corruption crusade that was mounted immediately after the handshake. My concern was that corruption cartels were the last adversary that the BBI needed, especially as it appeared to be a one-sided assault on Deputy President Ruto’s patronage network. Secondly, I was persuaded that the country was headed into an economic crisis (that is now unfolding). By embracing Uhuru Kenyatta, Raila Odinga was in essence sanitising Jubilee’s economic delinquency, and jumping into a sinking ship. In fact, I postulated that by the time of his departure from office, Uhuru Kenyatta would be more unpopular than Moi was in 2002.

Raila dismissed both concerns. I was particularly bemused by his prognosis that an economic crisis would not hurt because Zimbabwe’s Mugabe seemed to have survived a much more severe one (Mugabe was still in office then). It was not long before it became apparent that an economic storm was brewing and an urgent discussion was convened. At the end of my presentation, Raila came back with what to me was a bolt from the blue: he wanted to know how the president could be helped and went as far as to request that I write a paper that he would discuss with Kenyatta. That is the moment it dawned on me that, in his mind, Raila was already in government, or, as we say in Swahili, tumewachwa kwa mataa (we had been abandoned at the traffic lights). I did not respond and needless to say, no such paper was forthcoming. Looking back, Kenyatta had all along been banking on a personal deal with Raila. Two anecdotes will suffice to illustrate the point—they are by no means the only ones.

On the eve of the declaration of the official results of the August 8 presidential election, the NASA presidential campaign team was holding a quiet vigil of sorts when a muted drama, that went unnoticed by most of the people in the room, played out. A wheeler-dealer known to have business links with the Kenyatta family walked up to Raila and said that “mama is waiting.” Although spoken in low tones, colleagues within earshot became curious and sought to know who “mama” was. The awkward silence that ensued gave the game away. A statement unequivocally rejecting the election results was quickly drafted for Raila to issue; it had not been on the evening’s agenda. It is unlikely that we will ever know whether Raila was in on the plan to meet “mama” and what the rendezvous would have engendered. History oftentimes turns on chance.

The second one was in late November, shortly after we launched the protest movements that included a consumer boycott of Brookside Dairy products, among others. I received a call from a colleague alerting me that he had directed to me a “foreign journalist” who was frantically looking for Ida Odinga (she was out of the country at the time). The name of the “foreign journalist” was Christina Pratt (née Kenyatta). It would seem Ms. Pratt had presumed name recognition as she did not see fit to introduce herself or give her reason for calling and so, not recognising the name, my colleague had brushed her off for a couple of days; he responded once I told him who the caller was. Such was the urgency that Ms. Pratt even sought to know whether she could travel to where Ida Odinga then was, which proposal was declined. I gather that contact was eventually made and a home visit, of the kind we call itega in Gikuyu (gift giving), was arranged.

As observed, the point of these anecdotes is that Kenyatta had been banking on resolving the election impasse privately with Odinga, kinyumbani (domestically) as we say in Swahili; the handshake was the actualisation of Kenyatta’s desire. But by having chosen to personalise a political crisis, Uhuru and Raila would seem to have overestimated their personal power and underestimated their adversaries.

Uhuru and Raila seemed not to realise that refusing to categorically rule themselves out of the 2022 contest was guaranteed to frame the BBI initiative as succession politics. It did not help that the anti-graft war was increasingly being perceived as a political takedown of William Ruto. Economic hardship also began to bite, making the ground less than enthusiastic, particularly in Kenyatta’s central Kenya political base. Raila’s contention, as cocky as it was self-serving, that Kenyatta’s political clout would shrug off the economic distress has not aged well. Week after week, no sooner would the joint nationwide meet-the-people engagements they had promised be announced but they would fizzle out.

The BBI Report is the product of these missteps. What many Kenyans will not know is that the BBI task force was not constituted to produce a technical report. Rather, it was initially envisaged as a team of political advisors to the two principals, in line with the principals’ commitment that they would be personally leading the engagements with the people. It would seem that once the ground became hostile, the task force was repurposed to collect views and write a report—a task that it was clearly neither suited for nor prepared for. Suffice it to say that, given the depth and wealth of talent and experience in governance reform that we have gained in our two-decade constitutional reform struggle, the BBI task force is not in the country’s first or even second eleven.

Uhuru and Raila seemed not to realise that refusing to categorically rule themselves out of the 2022 contest was guaranteed to frame the BBI initiative as succession politics

In the midst of the debate about the flaws of the report, we risk losing sight of the fact that the handshake was a product of a failed presidential election. The real problem is one of incumbents who, sensing defeat, monkey-wrench the election to the point where it is impossible to get an outcome. Without a clear outcome, a power-sharing settlement is negotiated and the incumbent gets to stay in power. This model of retaining power was invented by the Mwai Kibaki administration in 2007 and has quickly gained currency, being copied in Zimbabwe, Madagascar and Togo to name a few countries.

How does the BBI report propose to end this? It makes no mention of the problem, let alone offering proposals; there is, in fact, no mention of free and fair elections in the entire report. There is perhaps no greater indictment of the handshake than the fact that we are now hurtling towards another toxic, high-octane, do-or-die election. Had Uhuru and Raila stuck to the path of honest brokers committed to midwifing the new political dispensation that they had promised instead of the political intrigues and self-aggrandisement that we are now witnessing, things on the ground could have been very different.

A while back, this columnist enumerated four critical historical junctures at which nation-building opportunities were squandered through a failure of leadership. Make that five.

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