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‘I Don’t Understand Why Kenyans Are Broke’: Mr. Kenyatta’s Debt Distress Revisited

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Many Kenyans have been wondering why we are told that the economy is growing at a brisk 5 to 6 per cent year after year, yet they are not feeling it. Instead, big companies are issuing profit warnings and laying off people. Kenya’s public debt has increased threefold over the last six years, from Sh1.8 trillion to Sh6 trillion and although the data shows that the economy is growing, the tax base is not expanding and revenue is falling short as debt service charges are rising.

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‘I Don’t Understand Why Kenyans Are Broke:’ Mr. Kenyatta’s Debt Distress Revisited
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In 2018, following the Raila-Uhuru détente we call the handshake, I went against the grain and argued against the anti-corruption campaign that ensued. My reasons were simple enough; Uhuru and Ruto were jointly culpable for the administration’s corruption, hence my contention that the fight against corruption was being politically weaponised. I postulated that politicising the war on graft would blow back on the handshake (it has).

I voiced my concerns both publicly and privately. The response I got was that the anti-graft drive was strictly economic, and not political, motivated by the realisation that the government was hurtling towards a financial crunch. Different people on both sides of the handshake deal mentioned the figure of Sh300 billion, which they claimed was the amount that could be saved by stopping graft. I tried to explain the nature of the crisis that was unfolding but no one wanted to hear that fighting corruption was not the silver bullet. Heads were firmly in the sand.

The Sh300 billion figure cropped up again a few weeks ago, this time as the amount of tax payments that are in dispute. It was disclosed that the government is proposing legislation that will require the disputed figures to be paid up front. It does not take much imagination to see how such a law could be abused. A government as desperate for cash as this one can make inflated tax assessments—which tax one has to pay first and ask questions later—while also opening another avenue for tax officials to extort taxpayers. It can be used for political persecution or to cripple competitors and businesses targeted for acquisition by our rapacious crony capitalist cartels.

Why is the government clutching at straws? Let’s have a look at the finances. The government plans to spend Sh2.6 trillion in the current financial year (2019-2020). It plans to finance this spending through domestic revenue to the tune of Sh1.88 trillion (Sh1.81 trillion tax and Sh70 billion non-tax, respectively), Sh701 billion of debt, and external grants of Sh19.5 billion. Of the Sh701 billion of debt, it plans to borrow Sh434 billion domestically, and Sh267 billion from foreign lenders—comprising of Sh200 billion in commercial debt and the balance of Sh67 billion in soft loans from development lenders.

Let us put some perspective to these numbers. Over a quarter (27 per cent) of the budget is debt-financed and 90 per cent of this debt will be commercial—30 per cent from foreign lenders and 60 per cent from the domestic market (we often overlook the fact that domestic debt is commercial). The Jubilee administration has been doing this for six years running. When it took office, we had a single $600 million foreign commercial loan, which was paid off using the first Eurobond issue. Today, a third of our foreign debt amounting to $10 billion is commercial. The administration justified the $2.8 billion debut Eurobond issue, the largest African issue to date, on the promise that it would replace domestic borrowing, thereby leaving domestic credit to the private sector and reducing interest rates. It did not. Instead, the administration ratcheted up domestic borrowing as well and crowded out the private sector completely. It is also worth reminding ourselves that the proceeds of that Eurobond cannot be accounted for.

The Sh701 billion deficit translates to the government spending 37 per cent more than its income. This is like a Sh30,000 earner who has just acquired a credit card deciding that she can afford to live large by spending Sh40,000 a month. Now, let us assume that the credit card charges 15 per cent per year, and requires 5 per cent repayment of the outstanding principal every month. A year down the road, the monthly debt service will be in the order of Sh7,500, which is not too bad as she will still be spending Sh2,500 more than her salary after debt charges. But four months later the debt service charge will start eating into her salary and by the end of the second year, she will be paying Sh15,000 in debt charges a month and owing Sh. 240,000. If she were to run into a credit limit at that point, she would have to live on Sh. 15,000 a month— half her salary—and her lifestyle will definitely have to change drastically.

This scenario will be familiar to people who have abused credit cards. It is the situation we are in—six years of abuse of the national credit card. For the country, it is unprecedented; we are one of the few African countries that escaped the 1980s-90s debt crisis that was resolved by the Highly Indebted Countries Initiative (HIPC). But I gather that this is not the first time that the bloke at the helm has over-swiped.

Many Kenyans have been wondering why we are told that the economy is growing at a brisk 5 to 6 per cent year after year, yet they are not feeling it. Instead, big companies are issuing profit warnings and laying off people. A related question is why government revenue is falling short when the economy is supposedly booming. Under Jubilee, the tax revenue as a percentage of GDP has declined from 18 per cent to 15 per cent, the lowest level since the 90s. The three percentage points difference is, surprise, surprise, Sh300 billion.

Jubilee has increased our public debt threefold over the last six years, from Sh1.8 trillion to Sh6 trillion and counting. Unlike our consumer, however, the government will argue that its debt has been invested. But investments are risky, or long term. Moreover, you don’t borrow short-term to invest long-term as the government has been doing. If you do, the debt repayments eat into the working capital, and you will soon be defaulting on your suppliers, as the government is doing.

Under Jubilee, the tax revenue as a percentage of GDP has declined from 18 per cent to 15 per cent, the lowest level since the 90s. The three percentage points difference is, surprise, surprise, Sh300 billion.

Government borrowing is predicated on the expectation that the projects financed will stimulate productive investment that will in turn generate tax revenues to service the debt. But very little of this debt has yielded any economic benefits that would in turn generate tax revenues. The Standard Gauge Railway (SGR)—the largest of these projects—has not stimulated any new economic activity. Much to the contrary, all it has achieved to date is to disrupt port logistics and road haulage while increasing costs and inefficiency for importers. Right now, its net economic contribution is negative. All indications are that the Galana-Kulalu irrigation scheme is a white elephant, and we know for sure that the economic contribution of the Arror and Kimwarer dams is zero.

Moreover, the government shoots itself in the foot by awarding the construction projects to foreign— predominantly Chinese—state-owned firms. This undermines revenue in two ways. First, the companies are exempted from paying tax. Second, the money they make is repatriated, denying the economy the multiplier effect it would have if the money had been earned by domestic firms. I gather that Uhuru Kenyatta was banging tables the other day demanding to know why Kenyans are broke, how come the money spent on government projects is not circulating in the economy.

Let us take his flagship project, the SGR. The man went and swiped the national credit card and the Chinese delivered the goods. The money stayed in China, debited from our loan accounts in the Chinese banks and credited to the suppliers’ bank accounts. We are paying the loans from our pockets. This year, we’ve budgeted to pay the Chinese banks Sh94 billion, up from Sh39 billion last year. Far from circulating it in the economy, foreign debt-financed government projects are draining money from the economy.

Thus, although the data shows that the economy is growing, the tax base is not expanding and revenue is falling short as debt service charges are rising. While tax revenue has just about doubled under the Jubilee administration, from Sh900 billion in the 2012-2013 financial year to Sh1.49 trillion in the last financial year (2018-2019)—translating to 15 per cent per year—interest payments have increased three-fold from Sh93 billion to Sh390 billion, translating to 52 per cent per year. Consequently, from consuming 12 per cent of revenue, interest payments have risen to 26 per cent. It should not come as a surprise that the government is having trouble paying suppliers. It is also noteworthy that the increase in the cost of interest payments is in the order of—here we go again—Sh300 billion.

Last year the government projected that it would raise Sh1.77 trillion in tax revenues, later revised downwards to Sh1.67 trillion. It managed to raise 1.5 trillion, respectively Sh270 billion and Sh170 billion short of the approved and revised budgets. Still, it budgeted to raise Sh1.8 trillion in 2019. At the end of the first quarter of this year the government had raised Sh372 billion. If the trend remains, Sh1.49 trillion will have been raised—about the same as last year—a shortfall of, well, Sh300 billion.

If the government were to borrow the whole amount this would increase debt financing to a trillion shillings, that is, 38 per cent of the budget or 67 per cent of revenue (remember that revenue is projected at just about Sh1.5 trillion). If it were to borrow domestically, that would also suck in the little credit that is trickling to the private sector. Moreover, the interest rate caps imposed three years ago have now been removed. The caps were meant to benefit private borrowers but the only beneficiary was the government—enabling it to borrow while postponing the political price that would have been exacted had interest rates surged to the mid-20s—as they would have. But the economy has paid the price because, by making it difficult for banks to price risk, the rate caps made the government’s crowding out of the private sector in the credit market more severe than it would have otherwise been.

It should not come as a surprise that the government is having trouble paying suppliers. It is also noteworthy that the increase in the cost of interest payments is in the order of—here we go again—Sh300 billion.

With the caps removed, the government’s excessive appetite for debt will now put upward pressure on interest rates, including the government’s own cost of domestic borrowing. The math is eye-popping; the government’s domestic debt is in the order of Sh3 trillion. A one percentage point increase in the cost of borrowing translates to a Sh30 billion increase in interest expenditure. How quickly an interest rate rise is transmitted into actual cost depends on the structure of the debt—the more short-term, the faster. Jubilee has done a good job of borrowing at the short end of the market, and so transmission will be relatively quick. The exchange rate presents a similar conundrum. The annual servicing of external debt is in the order $2.5 billion, and a depreciation by one shilling translates to a Sh2.5 billion increase in the cost of servicing the debt. It should come as no surprise then that the IMF’s contention that the government is propping up the shilling raised a furore.

Belt tightening is the sensible thing to do when a person or a business is over-indebted. For governments it is a little more complicated. The government is the single largest entity in the economy, and what it does has feedback loops that can amplify the problems it is trying to solve. The problem we have now is that the economy has become addicted to expansionary budgets. Five years ago, government expenditure accounted for a fifth of annual GDP growth, meaning that when growth was reported at 5 per cent, it meant that the private sector accounted for 4 per cent and the government for 1 per cent. Today, the share of the private sector is down to 3 per cent and the government’s share has doubled to 2 per cent. In effect, belt tightening has to contend with the economy suffering withdrawal symptoms—a weakening economy feeding into an even bigger revenue shortfall, requiring even more belt tightening.

This whole conundrum is how countries end up in a Greek-style downward spiral of a contracting economy and ballooning indebtedness. The case of Mozambique is instructive. Before the “tuna bond” scandal unfolded, Mozambique’s economy was roaring at 7 per cent per year, riding on post-conflict reconstruction and the discovery of huge offshore natural gas reserves. The loan sharks moved in. In 2013 Mozambique borrowed $2 billion—equivalent to a third of the budget—in privately placed bonds known as “loan participation notes” to finance a tuna fishing fleet and maritime security, of which only $850 million was made public. It has recently emerged from a fraud and money laundering court case in New York that at least $200 million was stolen and shared out between the investment bankers and Mozambique’s who’s who, including the finance minister and the president’s son.

In early 2016, Mozambique defaulted on interest due on the $850 million. Shortly thereafter, the secret loans were exposed. Money dried up. By the end of the year, the currency had fallen 40 per cent, causing the debt-to-GDP ratio to increase from 55 per cent to 120 per cent. Everything unravelled. Serial defaults and debt restructuring became the order of the day. Growth tumbled to 3.3 per cent last year and is now down to just over 2 per cent. It is going to be a long and painful climb out of the mess.

Which brings me to the question that many people are asking: what is the solution? I have opined that our debt distress will be resolved by one of two scenarios: the Ethiopia or the Sudan scenario. This is why:

To dig ourselves out of the debt quagmire requires four things. First, you need a dollop of cheap money to cushion the economy and vulnerable groups as the government withdraws from domestic borrowing so as to release credit to the private sector, restructure government finances, and rebalance the economy more generally. My guesstimate is a minimum of $3 billion (yes, Sh300 billion!) to $4.5 billion. The only source of such money is an international bailout. Second, to get financiers to buy in, you need a bankable plan. Third, you need a credible turn-around team to implement it. It is not a job for yes-men and yes-women—you need people who can stare down Kenyatta and his crony capitalist cartels. Fourth, economic turnarounds entail making tough unpopular decisions and pushing through painful reforms, and that requires political goodwill. It is not the sort of thing you can do with the 2022 political warfare raging—as we witnessed it in the Kibra by-election.

At the end of the first quarter of this year the government had raised Sh372 billion. If the trend remains, Sh1.49 trillion will have been raised—about the same as last year—a shortfall of, well, Sh300 billion.

This is the situation that Ethiopia found itself in two years ago when the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) coalition realised that only a leadership change could save it. Fortunately for Prime Minister Abiy Ahmed, there was a lot of low-hanging political fruit—releasing political prisoners, making peace with Eritrea, appointing women— that he could use to build goodwill, bring in some money and buy time. Still, that’s all he’s been able to do— he is still circling the big economic reform questions, and he now runs the risk of his political honeymoon ending before he gets started.

Sudan’s Omar al-Bashir sought to do the same thing but it was too little too late. Just over a year before he was toppled, amid mounting protests and a deepening economic crisis, he dissolved the government, intending to constitute an economic turn-around team. But the ship of state was already too leaky and his key appointees turned down his overtures (his choice of finance minister is now Prime Minister).

Can the Jubilee administration pull a political rabbit out of the hat like the EPDRF did in Ethiopia? Doubtful. For one, the EPRDF had the advantage of a parliamentary system which enables change of leadership without going through elections. But it is also the case that for a President at the tail end of his tenure, an economic reform programme would be all pain and no gain. Moreover, a lot of what needs to be done means reversing his policies, and he would have to cede a fair amount of power, making him even more of a lame duck than he already is. And having left it until the ship was leaking, there is also the question of who loves him enough to jump in when its owners—the Moses Kurias of this world —are jumping out. So his best strategy is the path of least resistance—kick the can and hope and pray that the bottom does not fall out this side of the election, be that by way of a financial meltdown or people taking to the streets.

Five years ago, I cautioned Jubilee that it had embarked on a reckless fiscal path, to wit, “We cannot afford to continue on the fiscal path that we are on. It is reckless. This mega-infrastructure madness has to stop. If we don’t do it ourselves, the iron laws of economics will do it for us—and that, take it from me, does not come cheap.”

We say in Gikuyu mūrega akīīrwo ndaregaga akīhetwo: a person who rejects counsel will listen when the consequences arrive. That moment is upon us.

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

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Lessons From India’s COVID Calamity

Neglect of the public healthcare system, suppression of scientific information and sacrificing citizen welfare for political mileage have led to the public health crisis facing India today.

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Lessons From India’s COVID Calamity
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An Australian newspaper called it “Modi’s COVID apocalypse”. The Indian activist and author Arundhati Roy calls it “a crime against humanity”. These descriptions of India’s current public health crisis may seem alarmist, but they are not far from the truth. By the end of April, India was recording more than 300,000 new COVID infections and nearly 3,000 deaths per day, a 30-fold increase from September last year, when the country reported a new infection rate of 11,000 per day. Media reports are showing overflowing crematoriums and hospitals overwhelmed by the number of patients seeking treatment. Reports of people dying in ambulances outside hospitals because the latter did not have enough beds or oxygen cylinders reveal a healthcare system that is on its knees.

However, according to those who are witnessing the catastrophe first-hand, the horrifying images shown in the local and international media are just a microcosm of what is really happening on the ground. Even those with money and connections are unable to secure the healthcare they need. Barkha Dutt, a famous media personality in India who lost her father to COVID last week, told ITV that despite her privileges and connections, she could not get access to the treatment her father needed. She never imagined that she would become the story that she has been covering for months. She said lack of drugs and equipment in New Delhi’s hospitals is even forcing people to go to Sikh temples, which are supplying oxygen for free to those who need it. Many families in New Delhi and other large cities are treating their sick relatives at home with oxygen cylinders, some bought at exorbitant rates on the black market. Crematoriums cannot keep up with the number of bodies arriving at their gates. The smell of death is everywhere.

Many of the current deaths are not exclusively due to the virus, but also to a lack of preparedness on the part of India’s healthcare system, which suddenly became overwhelmed due to a dramatic spike in corona cases. Analysts say the easing of restrictions and complacency on the part of Indians in general led to the crisis. People went back to work and continued with their daily lives as if there was no pandemic. The winter wedding season was in full swing in cities like New Delhi.

On its part, the government did little to avert the crisis by allowing the Kumbh Mela, the world’s largest religious gathering that is held along the banks of the Ganges river, to take place. The gathering became a superspreader event, as did the many political rallies held in states like West Bengal, which were attended by hundreds of people. At one such rally, Prime Minister Narendra Modi even boasted that the presence of large numbers of people at the rallies showed that his political party, the Bharatiya Janata Party (BJP), had massive support. Social distancing and wearing of masks were not prevalent at these crowded meetings.

In January, Modi told leaders at the World Economic Forum that India had “saved humanity from a disaster by containing corona effectively”. He said that India had defied expectations of “a tsunami of corona infections”. Now he is having to eat his own words. Not only has India, the world’s second most populous country, become the epicentre of the disease – with new aggressive variants being reported every week – but it is in the very awkward position of having to seek aid from other countries, including its long-time rival Pakistan, which has offered to help. The UK, USA and other governments plan to send oxygen and other medical supplies to India.

India has tended to view itself as a regional economic powerhouse, and so being reduced to a recipient of humanitarian aid is having a wounding effect. This is not how Modi, whose Hindu nationalist rhetoric has ignited a “Hindu First” movement in India, would like India to be viewed. India’s prime minister now finds himself reduced to having to accept medical aid for a country that has marketed itself as a destination for medical tourism and the “pharmacy of the world” that manufactures affordable drugs for developing nations. The Serum Institute of India is currently producing a large proportion of the AstraZeneca vaccine that is being rolled out in many countries. But Modi has decided to nationalise the institute as well, and has banned exports of the vaccine until the country sorts out its own health crisis, leaving millions of people around the world, including Kenya, in limbo.

India’s public healthcare system was already strained before the pandemic. The government spends a measly 1 per cent of its budget on health. The medical needs of Indians are met mostly by the private sector. Nearly 80 per cent of the healthcare in urban areas is provided by private facilities. In rural areas, 70 per cent of  the population relies on private clinics and hospitals, which are unaffordable for the majority. This privatisation of healthcare has come at a huge cost. Poor Indians suffer disproportionately from preventable diseases. Malnutrition rates among mothers and children are also among the highest in the world. What we are witnessing is how neglect of public healthcare systems can have long-term negative consequences, especially during a disaster or an epidemic.

India is also a lesson in how leaders can impact the spread of a disease. Since he took office, Prime Minister Modi has tried very hard to control public perceptions about his achievements and the virtues of the BJP, which he has filled with spin doctors who try to present a rosy image of India under his leadership. Several journalists have been arrested under Modi’s watch and media organisations that call him out are dismissed as unpatriotic. News channels in India are dominated by pro-government news anchors and journalists who have twisted the narrative in favour of Modi, even when he stands in the way of press freedom. In March 2020, in the early days of the pandemic, Modi asked India’s Supreme Court to stop media organisations from publishing any COVID-related news without getting government clearance first. Thankfully, because the Supreme Court is obliged to protect the rights and freedoms enshrined in India’s constitution, including freedom of the press, the court refused his request.

What we are witnessing is how neglect of public healthcare systems can have long-term negative consequences.

Like Jair Bolsonaro in Brazil and Donald Trump in the USA, Modi underplayed the scale of the pandemic and painted independent media and journalists who questioned his policies as enemies of the people. As a result, more than half a million Americans, nearly 400,000 Brazilians and some 200,000 Indians have died from COVID-19. The link between a paranoid, media-hostile leadership and negative health outcomes is evident in these cases.

Many independent journalists and observers believe that the official figures on COVID deaths and infections put out by the Indian government are a gross underestimation, and that the actual figures could be two or three times more than those that are being reported. Crematoriums are reporting more cremations adhering to COVID protocols than what is being given as the official death toll from COVID-19. This could be partly because many deaths are occurring at home and so are not being reported. In addition, people who die from COVID but who were not tested are not recorded as having died from the disease.

Meanwhile, the BJP government,  is assuring India’s 1.4 billion citizens that it is doing everything to increase the supply of oxygen and increase vaccination levels among those over the age of 18, but these measures are coming a little too late. The death toll is likely to rise significantly over the coming weeks.

Lack of trust in the government may be the biggest hurdle countries face as they try to contain the virus. In Kenya, the theft of COVID-19 donations last year and massive corruption scandals at the state-run medical supplies agency, KEMSA, have severely diminished citizens’ faith in the government’s willingness and ability to protect them. Moreover, apart from periodic lockdowns and curfews, there seems to be no strategy on how prevention measures will be instituted in the long term.  Also no one is quite sure when vaccination will reach “herd immunity” levels; people like me who have received their first dose of the AstraZeneca vaccine under the COVAX facility – a global mechanism for pooled procurement and distribution of vaccines for low and middle income countries –  still don’t know for sure if they will get their second jab, a scenario complicated by the fact that Modi has temporarily banned the Serum Institute from exporting the vaccines.

India has three important lessons for Kenya and the rest of the world.

Lesson 1: Do not neglect the public healthcare system

Countries around the world such as South Korea and Uganda that have successfully contained the coronavirus, managed to do so because the containment measures were led and funded by the public sector. Mass testing and other measures could not have taken place if the government did not initiate them, and ensured their successful implementation through a nationwide network of public healthcare facilities. But for this to happen, people must have faith in the government, which is sorely lacking in many countries.

The emphasis on private healthcare in countries such as Kenya and India has also left millions of poor and low-income people completely vulnerable to epidemics and pandemics. Public healthcare systems in all countries should be beefed up so that countries are not caught unawares in the future. Like public education, public health is an investment that reaps economic and social dividends in the future. COVID-19 has shown us the folly of relying solely on the private sector to meet citizens’ health needs and the importance of investing in robust public health systems that play a key role in detecting, containing and stopping the spread of infectious diseases.

Lesson 2: Do not suppress or distort scientific information and data

Donald Trump and Jair Bolsonaro consistently underplayed the threat posed by the novel coronavirus disease. Trump initially referred to it as a minor flu even as hospital beds were filling up, and even as infection rates were rising. Both leaders also mocked the wearing of masks and social distancing, which American and Brazilian scientists advocated. Trump’s rallies were filled with people who ignored corona protocols. In India, some politicians even said that the pandemic was a hoax intended to prevent farmers in Punjab from organising protests against the government’s agriculture policies. By ignoring the science, and peddling false information, these leaders put their countries’ citizens in immense danger. Vilifying the press – which is often the public’s main source of corona-related data and information – in the face of a pandemic is also not a good idea.

Lesson 3. Do not sacrifice public health to gain political mileage

Politicians should not sacrifice people’s lives at the altar of politics. Prime Minister Modi could have banned pilgrims from attending the Kumbh Mela, just as he ordered a nationwide lockdown early last year. But he chose not to do so because he wanted to appease Hindus and his Hindu nationalist base. In addition, he attended massive political rallies where few people wore masks, thereby facilitating the spread of the virus. He put people’s lives in danger because he wanted to score political points for his party. In the United States and Brazil, leaders chose to keep the economy running even if it meant losing hundreds of thousands of lives. In Kenya, politicians engaged in Building Bridges Initiative (BBI) rallies even as corona cases were rising. Moreover, parliamentarians are discussing BBI amendments to the constitution rather than what measures could be taken to protect Kenyans not just from the coronavirus disease and its various variants, but also from the hardships they have had to endure in the past year due to job losses and business closures. This is the type of shortsightedness and lack of compassion and vision among the country’s leadership that has led to the public health crisis facing India today.

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Towards an African Revolution: Fanon and the New Popular Movement (Hirak) Engulfing Algeria

Sixty years after the death of the revolutionary Frantz Fanon and the publication of his masterpiece, The Wretched of the Earth, Algeria is undergoing another revolution. In the first of a two-part blogpost, Hamza Hamouchene provides a brief historical account of Fanon’s anti-colonial thought, his critique of the postcolonial ruling elites and the new popular movement (Hirak) engulfing Algeria.

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Towards an African Revolution: Fanon the New Popular Movement (Hirak) Engulfing Algeria
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During the upheavals that the North African and West Asian region witnessed a decade ago – what has been dubbed the ‘Arab Spring’- Fanon’s thought proved to be as relevant as ever. Not only relevant, but insightful in helping to grasp the violence of the world we live in, and the necessity of a sustained rebellion against it.

Fanon’s wrote during in a period of decolonisation in Africa and elsewhere in the Global South. Born in Martinique, a French colony in the Caribbean, though Algerian by choice, he wrote from the vantage point of the Algerian revolution against French colonialism and of his political experiences on the African continent. Today, we might ask: can his analyses transcend the limitations of time? Can we learn from him as a committed intellectual and revolutionary thinker? Or should we just reduce him to another anti-colonial figure, largely irrelevant for our post-colonial times?

For me, as an Algerian activist, Fanon’s dynamic and revolutionary thinking, always about creation, movement and becoming, remains prophetic, vivid and committed to emancipation from all forms of oppression. He strongly and compellingly argued for a path to a future where humanity ‘advances a step further’ and breaks away from the world of colonialism and European universalism. Fanon represented the maturing of anti-colonial consciousness and he was a decolonial thinker par excellence.

Despite his short life (he died at the age of 36 from leukaemia in 1961), Fanon’s thought is rich and his work, in books, papers and speeches, prolific. He wrote his first book Black Skin, White Masks in 1952, two years before Điện Biên Phủ (the defeat of the French in a crucial battle in Vietnam) and his last book, The Wretched of the Earth in 1961. His 1961 classic became a treatise on the anti-colonialist and Third-Worldist struggle, one year before Algerian independence, at a moment when sub-Saharan African countries were gaining their independence – an experience in which Fanon was deeply and practically involved.

In Fanon’s intellectual journey, we can see the interactions between Black America and Africa, between the intellectual and the militant, between theory and practice, idealism and pragmatism, individual analysis and collective action, the psychological life (he trained as a psychiatrist) and physical struggle, nationalism and Pan-Africanism and finally between questions of colonialism and those of neo-colonialism.

Fanon did not live to see his adoptive country become free from French colonial domination, something he believed had become inevitable. Yet his experiences and analysis were the prism through which many revolutionaries abroad understood Algeria and helped to turn the country into the mecca of Third World revolution.

Six decades after the publication of his masterpiece The Wretched, Algeria is witnessing another revolution, this time against the national bourgeoisie that Fanon railed against in his ferocious chapter ‘The Pitfalls of National Consciousness.’

Fanon and colonial Algeria

The Algerian independence struggle against the French was one of the most inspiring anti-imperialist revolutions of the 20th century. It was part of a wave of decolonisation that had started after the Second World War in India, China, Cuba, Vietnam and many countries in Africa. The wave of decolonisation inscribed itself in the spirit of the Bandung Conference and the era of the ‘awakening of the South’, the Third world as  it was then known, which has been subjected to decades of colonial and capitalist domination under several forms, from protectorates to settler colonies.

Frantz Fanon methodically unpicked the mechanisms of violence put in place by colonialism. He wrote: ‘Colonialism is not a thinking machine, nor a body endowed with reasoning faculties. It is violence in its natural state.’ According to him, the colonial world is a Manichean world (to see things as having only two sides), which goes to its logical conclusion and ‘dehumanises the native, or to speak plainly it turns him into an animal.’

What followed the insurrection on November 1, 1954, launched by nationalist forces against the French, was one of the longest and bloodiest wars of decolonisation, which saw the widespread involvement of the rural poor and urban popular classes. Huge numbers of Algerians were killed in the eight-year war against the French that ended in 1962, a war that has become the foundation of modern Algerian politics.

Arriving at Blida psychiatric hospital in 1953 in French controlled Algeria, Fanon realised quickly that colonisation, in its essence, produced madness. For him, colonisation was a systematic negation of the other and a refusal to attribute humanity to them. In contrast to other forms of domination, the violence here was total, diffuse, and permanent.

Treating both French torturers and liberation fighter, Fanon could not escape this total violence. This led him to resign in 1956 and to join the Front de libération nationale (FLN). He wrote: ‘The Arab, alienated permanently in his own country, lives in a state of absolute depersonalisation.’ He added that the Algerian war was ‘a logical consequence of an abortive attempt to decerebralise a people’.

Fanon saw colonial ideology being underpinned by the affirmation of white supremacy and its ‘civilising mission.’ The result was the development in the ‘indigènes évolués’ (literally the more  evolved natives) of a desire to be white, a desire which is nothing more than an existential aberration. However, this desire stumbles upon the unequal character of the colonial system which assigns places according to colour.

Throughout his professional work and militant writings, Fanon challenged the dominant culturalist and racist approaches on the ‘native’: Arabs are lazy, liars, deceivers, thieves, etc. He advanced a materialist explanation, situating symptoms, behaviours, self-hatred and inferiority complexes in a life of oppression and the reality of unequal colonial relations.

Fanon believed in revolutionary Algeria. His illuminating book A Dying Colonialism (published in 1959) or as it is known in French L’An Cinq de la Révolution Algérienne, shows how liberation does not come as a gift. It is seized by the popular classes with their own hands and by seizing it they are themselves transformed. He strongly argued the most elevated form of culture – that is to say, of progress – is to resist colonial domination. For Fanon, revolution was a transformative process that created ‘new souls.’ For this reason, Fanon closes his 1959 book with the words: ‘The revolution …changes man and renews society, has reached an advanced stage. This oxygen which creates and shapes a new humanity – this, too, is the Algerian revolution.’

Bankruptcy of the post-colonial ruling elites

Unfortunately, the Algerian revolution and its attempt to break from the imperialist-capitalist system was defeated, both by counter-revolutionary forces and by its own contradictions. The revolution harboured the seeds of its own failure from the start: it was a top-down, authoritarian, and highly bureaucratic project (albeit with some redistributive aspects that improved people’s lives in the reforms carried out in the first years of independence).

However, the creative experiences of workers’ initiatives and self-management of the 1960s and 1970s were undermined by a paralyzing state bureaucracy that failed to genuinely involve workers in the control of the processes of production. This lack of democracy was connected with the ascendancy of a comprador bourgeoisie that was hostile to socialism, workers control and staunchly opposed to genuine land reform.

By the 1980s, the global neoliberal counter-revolution was the nail in the coffin and ushered in an age of deindustrialization and pro-market policies in Algeria, at the expense of the popular classes. The dignitaries of the new neoliberal orthodoxy declared that everything was for sale and opened the way for mass privatization.

Fanon’s work still bears a prophetic power as an accurate description of what happened in Algeria and elsewhere in the Global South. Fanon foretold the bankruptcy and sterility of national bourgeoisies in Africa and the Middle East today. A ‘profiteering caste’, he wrote, that tended to replace the colonial ruling class with a new class-based system replicating the old structures of exploitation and oppression.

By the 1980s, the Algerian national bourgeoisie had dispensed with popular legitimacy, turned its back on the realities of poverty and underdevelopment. In Fanon’s terms, this parasitic and unproductive bourgeoisie (both civilian and military) was the greatest threat to the sovereignty of the nation. In Algeria, this class was closely connected to the ruling party, the FLN, and renounced the autonomous development initiated in the 1960s and offered one concession after another for privatizations and projects that would undermine the country’s sovereignty and endanger its population and environment — the exploitation of shale gas and offshore resources being just one example.

Today, Algeria – but also Tunisia, Egypt, Nigeria, Senegal, Ghana, Gabon, Angola and South Africa, among others – follows the dictates of the new instruments of imperialism such as the IMF, the World Bank and negotiate entry into the World Trade Organisation. Some African countries continue to use the CFA franc (renamed Eco in December 2019), a currency inherited from colonialism and still under the control of the French Treasury.

Fanon predicted this behaviour of the national bourgeoisie when he noted that its mission has nothing to do with transforming the nation but rather consists of ‘being the transmission line between the nation and capitalism, rampant though camouflaged, which today puts on the masque of neo-colonialism.’ Fanon’s analysis of the class basis of independence speaks to the contemporary postcolonial reality, a reality shaped by a national bourgeoisie ‘unabashedly…anti-national,’ opting he added, for the path of a conventional bourgeoisie, ‘a bourgeoisie which is stupidly, contemptibly and cynically bourgeois.’

Fanon also noted in 1961 the international division of labour, where we Africans ‘still export raw materials and continue being Europe’s small farmers who specialise in unfinished products.’ Algeria remains in a extractivist model of development where profits are accumulated in the hands of a foreign-backed minority at the expense of dispossession of the majority.

The Hirak and the new Algerian revolution

Fanon alerted us sixty years ago that the enrichment of this ‘profiteering caste’ will be accompanied by ‘a decisive awakening on the part of the people and a growing awareness that promised stormy days to come.’ In 2019 Algerians shattered the wall of fear and broke from a process that had infantilised and dazed them for decades. They erupted onto the political scene, discovered their political will and began again to make history.

Since 22 February 2019, millions of people, young and old, men and women from different social classes rose in a momentous rebellion. Historic Friday marches, followed by protests in professional sectors, united people in their rejection of the ruling system and their demands of radical democratic change. ‘They must all go!’ (Yetnahaw ga’), ‘The country is ours and we’ll do what we wish’ (Lablad abladna oundirou rayna), became two emblematic slogans of the uprising, symbolising the radical evolution of a popular movement (Al Hirak Acha’bi). The uprising was triggered by the incumbent president Bouteflika’s announcement that he would run for a fifth term despite suffering from aphasia and being absent from public life.

The movement (Hirak) is unique in its scale, peaceful character, national spread – including the marginalised south, and participation of women and young people, who constitute the majority of Algeria’s population. The extent of popular mobilisation has not been seen since 1962, when Algerians went to the streets to celebrate their hard-won independence from France.

The popular classes have affirmed their role as agents in their own destiny. We can use Fanon’s exact words to describe this phenomenon: ‘The thesis that men change at the same time that they change the world has never been as manifest as it is now in Algeria. This trial of strength not only remodels the consciousness that man has of himself, and of his former dominators or of the world, at last within his reach. The struggle at different levels renews the symbols, the myths, the beliefs, the emotional responsiveness of the people. We witness in Algeria man’s reassertion of his capacity to progress.’

The Hirak succeeded in unravelling the webs of deceit that were deployed by the ruling class and its propaganda machine. Moreover, the evolution of its slogans, chants, and forms of resistance, is demonstrative of processes of politicisation and popular education. The re-appropriation of public spaces created a kind of an agora where people discuss, debate, exchange views, talk strategy and perspectives, criticize each other or simply express themselves in many ways including through art and music. This has opened new horizons for resisting and building together.

Cultural production also took on another meaning because it was associated with liberation and seen as a form of political action and solidarity. Far from the folkloric and sterile productions under the suffocating patronage of authoritarian elites, we have seen instead a culture that speaks to the people and advances their resistance and struggles through poetry, music, theatre, cartoons, and street-art. Again, we see Fanon’s insights in his theorisation of culture as a form of political action: ‘A national culture is not a folklore, nor an abstract populism that believes it can discover the people’s true nature. It is not made up of the inert dregs of gratuitous actions, that is to say actions which are less and less attached to the ever-present reality of the people.’

The struggle of decolonisation continues

Leaving aside largely semantic arguments around whether it is a movement, uprising, revolt or a revolution, one can say for certain that what is taking place in Algeria today is a transformative process, pregnant with emancipatory potential. The evolution of the movement and its demands specifically around ‘independence’, ‘sovereignty’ and ‘an end to the pillage of the country’s resources’ are fertile ground for anti-capitalist, anti-imperialist and even ecological ideas.

Algerians are making a direct link between their current struggle and the anti-French colonial resistance in the 1950s, seeing their efforts as the continuation of decolonisation. When chanting ‘Generals to the dustbin and Algeria will be independent’, they are laying bare the vacuous official narrative around the glorious revolution and revealing that it has been shamelessly used to pursue personal enrichment. We see a second Fanonian moment where people expose the neo-colonial situation and emphasise one unique characteristic of their uprising: its rootedness in the anti-colonial struggle against the French.

Slogans and chants have captured this desire and made references to anti-colonial war veterans such as Ali La Pointe, Amirouche, Ben Mhidi and Abane: Oh Ali [la pointe] your descendants will never stop until they wrench their freedom!’ and ‘We are the descendants of Amirouche and we will never go back!’

The struggle of decolonisation is being given a new lease of life as Algerians lay claim to the popular and economic sovereignty that was denied to them when formal independence was achieved in 1962. In Fanon’s prophetic words: ‘The people who at the beginning of the struggle had adopted the primitive Manichaeism of the settler – Blacks and Whites, Arabs and Christians – realise as they go along that it sometimes happens that you get Blacks who are whiter than the whites and the hope of an independent nation does not always tempt certain strata of the populations to give up their interests or privileges.’

This two-part long read is an extract from a chapter in a forthcoming book Fanon Today: The Revolt and Reason of the Wretched of the Earth (edited by Nigel Gibson, Daraja Press 2021).

This article was first published in the Review of African Political Economy Journal.

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South Africa: Why an Amnesty for Grand Corruption Is a Bad Idea

A full confession can bring amnesty and immunity from prosecution or civil procedures for the crimes committed. Therein lies the central irony. As people give more and more evidence of the things they have done they get closer and closer to amnesty and it gets more and more intolerable that these people should be given amnesty.

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South Africa: Why an Amnesty for Grand Corruption Is a Bad Idea
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South Africa’s former Public Protector, Thuli Madonsela, provoked a political storm recently when she suggested that public servants implicated in grand corruption should be given the chance to apply for amnesty.

Many South Africans, weary of rampant, unchecked and unaccountable corruption, could be forgiven for asking: what on earth was she thinking?

Madonsela won the admiration of many South Africans because of her steely resolve in the face of malfeasance and breaches of the rules of integrity in public office. Her proposal suggested she might be going soft on corruption.

To be effective as the Public Protector Madonsela required many attributes, as I set out in my 2013 book, The Zuma Years. These included independence of mind, a very thick skin and a certain contrarian eccentricity that rendered her far less susceptible to the numerous attempts to intimidate her as she took on then president Jacob Zuma and his state capture network.

Her amnesty idea displays all of these characteristics.

It should be taken seriously, if only to affirm the merit of a diametrically opposed position.

It’s an inherently bad idea.

Bad timing

Madonsela’s timing is especially unfortunate. It is only in very recent times that the Hawks, the priority crimes investigating police unit, and other agencies of the criminal justice system appear to have recovered the institutional capacity to begin prosecuting those responsible for the deep-lying state capture project.

Recent developments have begun to suggest that the net is finally tightening around the bigger fish that are the true architects of systematic corruption in the country.

This has been widely welcomed. Accountability, at last.

Against the grain of this public view, Madonsela, a law professor, entered the fray to suggest that instead of being tough on the perpetrators, an olive branch should be extended.

This is an example of the “independent-mindedness” for which Madonsela was rightly acclaimed during her seven-year term as Public Protector from 2009-2016.

It is also not only contrarian, but also eccentric in that it makes so little sense.

To be fair to her, she tried to clarify later that she did not mean amnesty for every perpetrator, and certainly not the big fish. Her idea is targeted at those whose “status”, she says, “in the food chain is quite junior”.

But the first of a series of fatal flaws in her idea is about where to draw the line: on what basis should one distinguish the smaller from the bigger fish?

Those who had played a “minor but critical” role was how she framed her idea. There is already a problem here: is it possible for something to be both “critical” to a (criminal) enterprise and yet still “minor”?

I think not.

Half-baked idea

Madonsela confirmed that amnesty should be available on a legal rather than a moral basis. Yet, in a radio interview after she’d floated the idea, and drawn a lot of flak, she added to the confusion.

At first Madonsela spoke of people who may have “bent the rules” unwittingly, in which case, they may well have a legal defence to criminal conduct. Later, she clarified that she intended to cover individuals with “agency”, even to the extent that their palms have been “greased with money” (which, she argued, they would have to pay back in return for amnesty).

If the right to amnesty was indeed to be a legal entitlement, then the terms on which entitlement to amnesty applies have to be very clearly and carefully drawn. This much has been revealed in Constitutional Court decisions concerning the legal rationality of presidential amnesties or pardons in the case of women convicts and perpetrators of apartheid era offences.

Madonsela’s public policy rationale appears to be that without an inducement, the smaller cogs in the bigger wheels of state corruption may seek to hide and avoid prosecution when what is required is that they should come forward with information about the bigger fish.

Perhaps, then, an offer of amnesty – in effect, a legal right to indemnity from prosecution – deserves to be given serious consideration. This, especially if it is the case that the National Prosecuting Authority is struggling to pull together the evidence to bring strong prosecutions against the most powerful perpetrators of state capture corruption.

But there is no evidence that this is the situation. And, moreover, there are major downsides to be weighed in the balance.

The case against amnesty

First of all: deterrence.

The fact that amnesty has been granted in the past may encourage future corrupt actors to take the risk. The corollary is that the successful prosecution of corrupt officials is likely to discourage repetition.

Secondly, the arguments put forward by Madonsela would, in my view, provide grounds for mitigation in sentencing – not for amnesty. One example would be “small fish” cooperating with the investigative authority and providing evidence about the bigger fish. Another example would be if someone could show that they were bullied into bending procurement rules by a superior and more powerful individual in the system.

Another possible avenue – common practice in criminal justice systems around the world – is the use of a “plea bargain”. Here an accused person trades information in return for facing a less serious charge.

Amnesty would, in effect, deprive them of this opportunity and could thereby undermine the integrity of the whole criminal justice system.

The other major consideration is perception – both in the eyes of key stakeholders, such as the investment community and, secondly, the general public.

Investors are especially eager to see if South Africa has the capacity to hold to account those who contaminated the democratic state and so undermined fair competition by enabling a rent-seekers’ paradise. It is about the strength of the rule of law. Investors want to feel confident that this is one destination where the rule of law holds and where, because of state capture prosecutions, there is less risk of a repeat.

And surely, above all else, the public will feel cheated if perpetrators of state capture corruption, however “minor”, get away scot-free. This, more than anything, would encourage a lawless society, steeped in a culture of impunity rather than accountability.

A dangerous path to tread

Attempts to trade amnesty for information about state corruption have caused conflict as well as controversy in other countries. One notable example was in Tunisia in 2017.

But the biggest danger is that it simply sends the wrong message. This was aptly spelt out by esteemed South African artist William Kentridge reflecting on a previous attempt at taking the amnesty road in South Africa through the Truth and Reconciliation Commission process.

Admittedly, Madonsela has a different purpose in mind than the national reconciliation ambition of the Truth and Reconciliation Commission process. But, no, Advocate Madonsela, a blanket amnesty would send the wrong message at the worst possible time.The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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