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An IMF Straightjacket Is a Fitting End to Jubilee’s Reign of Hubris, Blunder, Plunder, Squander and Abracadabra

8 min read.

Six years of fiscal profligacy have finally caught up with the Jubilee administration. Money is short, it now admits, and the begging bowl is out. The IMF has been in town and will be back again. But the cure could be worse than the disease as Jubilee prepares to don an IMF straightjacket for the remainder of its term.

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An IMF Straightjacket Is a Fitting End to the Jubilee’s Reign of Hubris, Blunder, Plunder, Squander and Abracadabra
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The economic management space has become rather lively of late. A few weeks ago, the National Treasury published an updated national debt register that spooked quite a few people. A couple of days later, it circulated a draft debt policy for comments in whose wake followed a stern memo from State House to all state agencies. The subject of the memo was austerity measures and the following three directives were addressed to state corporations: “(a) to immediately remit the entirety of identified surplus funds to the National Treasury; (b) to assign (transfer ownership) of all the Treasury Bills/Bonds currently held in the name/or for the benefit of the State Corporations/SAGAs to The National Treasury, including any accruing interest by Friday, 15 November 2018; (c) to remit the entirety of Appropriations-in-Aid (AiA) revenues to The National Treasury”

SAGAs stands for Semi-Autonomous Government Agencies. Appropriations-in-Aid is the money that government agencies raise from the public, usually in fees; court fines, licences and payments for services. This money is usually factored into their budgets—for instance, if an agency’s approved budget is Sh1 billion and it expects to collect Sh200 million, the Exchequer will budget to fund the balance of Sh800 million.

It turns out that this memo was the agenda of the event at which Uhuru Kenyatta made his “why are Kenyans broke?” faux pas. Evidently, he had summoned the state corporation bosses to read them the riot act on the directive. Hot on the heels of the State House meeting, it was reported that Parliament had passed an amendment to the Public Financial Management Act requiring that all public agencies centralise their banking with the Central Bank of Kenya.

Why the sudden zeal?

The answer may be found in a press release issued by the IMF on 22 November disclosing that the Fund had concluded a visit to the country to review recent economic developments. It also disclosed that another visit was planned for early next year “to hold discussions on a new precautionary stand-by facility.” A precautionary standby facility is a credit line that IMF member countries can draw on in the event of a shock that affects a country’s ability to meet its external payment obligations, for example, a petroleum price shock, or a global financial crisis of such severity that a country’s foreign exchange resources would not be sufficient to cover both imports and debt servicing.

The previous standby facility, which was due to expire in March 2018, was suspended in the run-up to the 2017 general election because of non-compliance. In early 2018, the administration sought and secured a six-month grace period during which it would negotiate a new one (with no money available during the grace period as the government was not compliant). The grace period was to expire in September, but in August the talks collapsed. Some of the conditions that the IMF sought were the removal of both the interest rate cap and the controversial VAT on fuel. The exchange rate policy may have been another sticking point, as the IMF claimed that the government was artificially propping up the shilling, a contention that the Central Bank has vigorously contested.

It turns out then that the sudden flurry of activity may be all about impressing the IMF. Indeed, the centralisation of government banking—known as the Treasury Single Account (TSA)—is one of the IMF’s latest fads, And just as with IFMIS before it, TSA is supposed to be the silver bullet that will put an end to financial control woes.

There are at least two other developments that are consistent with the sort of demands that we can expect from the IMF.

First, the government has started to make wage bill noises again. The acting Treasury Cabinet Secretary was heard to lament at a conference convened to discuss the wage bill that it is consuming 48 per cent of revenue, way above the maximum of 35 per cent stipulated in the Public Finance Management Act. This appears to be a case of giving a dog a bad name. The total wage bill for the entire public sector including commercial enterprises was Sh600 billion, about 40 per cent of national revenue. But even this is misleading because commercial parastatals (Kenya Pipeline, Kenya Airports Authority, Central Bank, etc.) do not depend on government revenue. The consolidated public sector wage bill as a percentage of consolidated revenues is in the order of 34 per cent. This is not the first time that the government is cooking the wage bill figures.

It has also been reported that Kenya Power has applied for a 20 per cent tariff increase, in part to cover for the national government subsidy for low-income consumers. The IMF takes a dim view of subsidies of this kind and although this has not come into the public domain, I would expect the IMF to similarly take a dim view of the operational subsidy made to the SGR, which is even less defensible than the tariff subsidy.

Given that the same Jubilee administration that found IMF conditions unpalatable last year now appears to be bending over backwards to secure a deal, we are compelled to ask: what has changed?

Money is short. This year the government plans to borrow Sh700 billion. It plans to borrow Sh450 billion domestically, and Sh250 billion from foreign sources. Soft loans from development lenders are budgeted at Sh50 billion, leaving the balance of Sh200 billion to be sourced from commercial lenders, either by way of issuing sovereign bonds (Eurobonds) or by arranging syndicated bank loans. The Sh200 billion foreign borrowing is “net”, that is, over and above what the government will borrow to pay the principal installments on foreign bank loans (e.g. the Exim Bank of China SGR loans), and to refinance or roll-over maturing syndicated loans (thankfully, there are no Eurobonds maturing this year) amounting to Sh131 billion, bringing the total borrowing to Sh331 billion. As a rule, interest payments are paid out of revenue while the government aims to pay the principal by rolling-over or refinancing.

The government has access to three potential sources of this kind of money: budget support (also known as programme loans, issued by multilateral institutions, including the IMF itself), Eurobonds and syndicated loans. Of the three, the multilateral lenders are the cheapest, but they take long, come with conditions and usually require that an IMF programme be in place (although last year the World Bank did extend a programme loan without one).

Eurobonds are the next best option. The Government does not need an IMF deal to go to the sovereign bond market. Indeed, it did not have an IMF programme in place during its previous two bond issues: the debut issue in 2014 and the second one in February 2018. But circumstances do change. With as many as 20 African countries either already in or at high risk of debt distress, it may be that the market has signaled to the government that an IMF stand-by would be “an added advantage.” Indeed, the IMF itself has downgraded Kenya’s debt distress risk from low to medium.

Multilateral lenders are the cheapest, but they take long, come with conditions and usually require that an IMF programme be in place

For what it’s worth, the Jubilee administration is finally owning up to the fact that its finances are in a worse state than it has previously cared to admit. The new narrative heaps the blame on the now-suspended Treasury officials, Cabinet Secretary Rotich and Permanent Secretary Kamau Thugge. I was taken aback recently when a cabinet secretary who has a strong background in finance remarked that they were not aware how bad things were until Rotich and Thugge were booted out, while the central bank governor has been quoted blaming Rotich’s rosy revenue forecasts—which he has characterised as “abracadabra”—for encouraging the government to pile up debt. This is disingenuous because that is not how it is done. The borrowing is decided politically first, and then they cook the revenue numbers to show that we can afford it. The Governor has been part of the racket. It is also mean to mock one’s colleagues when they are in trouble, not to mention that the Central Bank has been deeply implicated in the Eurobond fraud cover-up under his watch. The Governor’s turn to be thrown under the bus may yet come, but I digress.

What is now inescapable is that six years of the most egregious fiscal profligacy has caught up with us. As this column argued a fortnight ago, the government is now hostage to fate—it can kick the can down the road and hope and pray that the crunch does not come this side of the election, in which case an IMF facility seems like a good cushion to have. But it comes with a health warning: the cure may be worse than the disease.

A couple of weeks ago, Lebanese people took to the streets and brought down the government in what has been dubbed the Whatsapp revolution. Those of us who are a bit long in the tooth remember Beirut as the byword for urban warfare. Lebanon’s sectarian warfare ended when its fractious and venal political elite worked out an inclusive eating arrangement of the kind that our equally venal eating chiefs are now crafting with handshakes, bridge building and whatnot. With no agencies of restraint, the chiefs finished the tax money and progressed to eating debt, chomping their way into a 150+ per cent of GDP debt (third highest in world after Japan and Greece) that is consuming half the government revenue in interest payments alone, and causing economic stagnation.

What is now inescapable is that six years of the most egregious fiscal profligacy has caught up with us

On its knees, the government passed an austerity budget in July. The austerity budget coincided with an IMF mission which recommended “a credible medium term fiscal plan aiming for a substantial and sustained primary fiscal surplus.” Primary fiscal balance is the difference between government revenue and recurrent expenditure excluding interest. It is achieved by raising more taxes and cutting wages and O&M (operations & maintenance) spending. These cuts usually fall most heavily on social spending.

As the government set about imposing more austerity and raising taxes, it unveiled a tax on voice-over-IP (VOIP) calls in October, the idea being to protect tax revenue from regular voice calls. It was the last straw. Evidently, the eating chiefs had not realised that this was the social lifeline for the youth. The people took to the streets. Two weeks later, the government fell. Lebanon is now in full financial meltdown. The IMF is nowhere to be seen.

Mozambique had an IMF programme in place when it ran into debt payment difficulties that forced the government to disclose more than a billion dollars of secret “Tuna bonds” debt. Now, the purpose of an IMF programme is to help a country in payment difficulties, but because the secret debt violated the terms of the IMF deal, instead of bailing Mozambique out, the IMF led the other donors in suspending aid to the country. Instead of helping put out the fire, the fire brigade decided that teaching the culprits a lesson was more important than saving the victims. Mozambique’s economy went into free fall, where it remains. This is the very same IMF that cooked our books to cover up the Eurobond theft.

The borrowing is decided politically first, and then they cook the revenue numbers to show that we can afford it

What alternative does Uhuru Kenyatta have? In economics, we talk of the orthodox and heterodox approaches to dealing with a sovereign financial crisis.

The orthodox approach is a formulaic one-size-fits-all approach which adheres to one economic school of thought known as neoclassical economics. Its prescriptions are fiscal austerity and doctrinaire free market ideology. It is, as is readily apparent, the IMF prescription. Heterodox is another name for unorthodox, and refers to a pragmatic strategy that draws from the entire spectrum of economic ideas from Austrian to Marxist political economy and everything in between.

The dilemma governments have to face is that the orthodox cure is sometimes worse than the disease, but it’s the one with the money behind it. Heterodox approaches work better, but they require a resolve and an imagination that many governments are unable to muster, especially when they have their backs against the wall.

Can the Jubilee administration muster the resolve for a heterodox response? Doubtful.

Four years ago I contemplated the Jubilee administration ending precisely where it is headed, to wit: “I cannot think of a more fitting epitaph for the Jubilee administration’s reign of hubris and blunder, plunder and squander, than the rest of the term spent savouring copious helpings of humble pie in an IMF straightjacket. Choices do have consequences. Sobering.

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David Ndii is a leading Kenyan economist and public intellectual.

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Land Title and Evictions in the Supreme Court of Kenya

Violent evictions of families from their homes are not exceptional events. They go to the heart of Kenya’s political economy and its long history of valorising the rights of those who hold private title.

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The Supreme Court of Kenya published its judgment in William Musembi v The Moi Educational Centre Co. Ltd. on the 16th July 2021. The case arose after fourteen families — the residents of two informal settlements, City Cotton and Upendo village in Nairobi — petitioned the High court following their evictions in 2013. They had lived on the land since 1968 when it was public land. The first respondent claimed that they had legitimately acquired title to the land by letters of allotment and that the land was therefore private land. According to Amnesty Kenya, the evictions began in the early morning, without warning. Groups of young men burst into homes. Four hundred homes were demolished and personal possessions were destroyed. Crowbars and sledgehammers were used. The police were present. They fired live ammunition and used teargas canisters during the operation.

In the High Court, Judge Mumbi Ngugi held that the petitioners’ rights to dignity, security, and adequate housing had been infringed. There had been a violation of the rights of children and elderly persons under the constitution. She awarded damages. At the Court of Appeal this judgment was partially set aside. While accepting that there had indeed been violations of the rights to dignity and security, the Court of Appeal nonetheless set aside the order of damages arguing that “there was no material before the court on the basis of which the orders for compensation were made” and that, because it was unable to work out how the damages had been quantified, “the only relief that should have commended itself to the trial Court was a declaration that the forced eviction and demolition of their houses without a Court order is a violation of their right to human dignity and security.” Following this, the petitioners appealed to the Supreme Court.

Importance of the Supreme Court judgment

The importance of this case is, as Gautum Bhatia has written, that it raised the question whether “the right to accessible and adequate housing could be applied inter se between private parties”. It can thus be distinguished from the same Supreme Court’s Mitu-Bell Welfare Society v The Kenya Airports Authority, which ruled on evictions from public land.

Amongst several issues for determination, the petitioners in the present case asked the court to reach a determination of the question whether the letter of allotment held by the first respondent, the Moi Educational Centre, was issued lawfully or legally. Because that question had not been conclusively determined at the High Court or at the Court of Appeal, the petitioners sought “a declaration that the acquisition of the suit property was illegal and unlawful.”

The Supreme Court declined to do this. Arguing that in the High Court Judge Mumbi Ngugi had been right in holding that the question of the propriety of the first respondent’s title was a matter for the National Land Commission and that it is the Land and Environment Court that properly has jurisdiction over this question, the Supreme Court held in William Musembi that “the title of the first respondent remains unimpeached”. Instead, it held, the only question it ought to determine was whether, in evicting the petitioners, the respondents violated the petitioners’ rights to human dignity and security, as well as the rights to housing and health.

It is on the basis of the “unimpeached” title of the first respondent that the court goes on to make its landmark finding. For determination by the court was the question whether the first respondent, being a private party, could nonetheless be responsible for the violation of constitutional rights. Recognising that “the mandate to ensure the realization and protection of social and economic rights does not extend to the first respondent” because it is a private entity which is not under any obligation to ensure the progressive or immediate realisation of those rights, the court found that private parties do nonetheless have a “negative obligation to ensure that it does not violate the rights of the petitioners.”

For Bhatia, the judgment’s significance lies partly in its finding that “a negative obligation not to interfere with socio-economic rights (such as the right to housing), …applies to both public and private parties” although he argues persuasively that “the distinction between negative and positive obligations is doing a lot of work” and that the concrete practice of evictions significantly blurs the boundary between public and private actors. He rightly notes that “evictions invariably involve concert of action between State forces and private landowners, with the latter relying upon the former (either directly, or through forbearance) to accomplish physically removing people from land.”

Public and private

If the distinction between negative and positive obligations is somewhat artificial, I also want to suggest that Kenya’s history of land grabbing shows that so too is the distinction between the state and private landowners. More than just state forces doing the bidding of private landowners, wielding batons and using bullets to break into homes in the early morning, in Kenya the state/private distinction is a mirage. In William Musembi, the court does not elaborate on the important history of letters of allotment in Kenya and the process by which they enabled public land to morph into private land. Instead, it affirms the first respondent’s title – and proceeds to make an important ruling on the obligations of private actors. However, the history of land grabbing and the murky past of letters of allotment is a critical one to keep at the front of our minds.

For determination by the court was the question whether the first respondent, being a private party, could nonetheless be responsible for the violation of constitutional rights.

The report of the Commission of Inquiry into the Illegal/ Irregular Allocation of Public Land established in 2003 set out in forensic detail the illegal and irregular land awards made over the years using the mechanism of the letter of allotment. Awards of land were made to the families of Presidents Kenyatta and Moi, numerous former ministers, members of parliament and civil servants, as well as to individuals in the military and the judiciary. The report sets out how out of proximity to the state, private property owners were created. Public land – land set aside for the building of public health clinics or schools for example – mysteriously turned into private land on which malls, private residences, and diplomatic headquarters appeared. No doubt some individuals acquired perfectly legitimate letters of allotment. But from the 1970s onwards, a thriving market in improper letters of allotment developed. They came to be treated as tradable land documents. Widely but mistakenly used as land titles (with the collusion of lawyers), they changed hands quickly in sales of grabbed land. This was done in order to get the benefit of the principle that an innocent third party for value without notice takes good title. The full extent of this practice is unknown: the Ndung’u Commission warned that its report provided only a snapshot of the illegal/irregular land allocations that had taken place over the years.

I have written elsewhere that land grabbing is sedimented in Kenya’s political economy such that we can describe it as a “grabbed state”. The “normal” economy is founded on accumulation by dispossession. It is not possible to understand Kenya’s political economy without an understanding of how the normal and the supposedly abnormal are pervasively linked. Far from land grabbing being an aberrant phenomenon that can be sharply distinguished from normal business practice, the illegal and irregular appropriation of land structures Kenya’s economy.

Widely but mistakenly used as land titles (with the collusion of lawyers), they changed hands quickly in sales of grabbed land.

There is no operative distinction between the public and the private in Kenya. This makes the judgment in the present case even more consequential: given the history of these murky conversions in title, the judgment’s finding that negative constitutional obligations can attach to private actors is likely to cover a great many potential eviction scenarios. Indeed, I would argue that given the history of land described above, the court should have gone further. Grounding its reasoning in Kenya’s history of land grabbing and the dispossession and discrimination that resulted, it could have held that positive socio-economic obligations (such as providing alternative accommodation) should extend to private parties. Or it might have held that given the extent of land grabbing — which is a matter of public record — the state should not agree to enforce a court order for eviction until it is satisfied that alternative accommodation has been provided.

Entrenching private property

Welcoming the Supreme Court’s judgment, Bhatia has noted that it “continues the welcome trend of judicial scepticism towards entrenched property rights.” The court demonstrated this scepticism by extending negative constitutional obligations to private actors. However, to do so, the Supreme Court moved to confirm the respondent’s title. That title it described as “unimpeached”. The court used this as the basis for setting out the first respondent’s obligations as a private owner. The extension of constitutional obligations to private actors is to be welcomed. But it is important to recognise also that by refusing jurisdiction to question the first respondent’s title – and ruling that this is a matter for another forum – the Supreme Court effectively sanctioned the enclosure of what the appellants claimed was unalienated public land and potentially legitimated the grabbing of public land.

The court does not elaborate on the important history of letters of allotment in Kenya and the process by which they enabled public land to morph into private land.

Instead, the Supreme Court might have used Art. 23 which provides for the authority of courts to uphold and enforce the Bill of Rights, to try to fashion a remedy. It could have expressly referred the question of the integrity of the first respondent’s title to the National Land Commission rather than state as unequivocally as it did that it is unimpeached. At the very least, given the importance of a letter of allotment and the question of title in the case, the court should have rehearsed Kenya’s history of land grabbing and corruption as revealed by the Ndung’u report so as to give it judicial notice and provide a starting point for the wider task of challenging ill-gotten titles by those who might seek to do so.

Reinstating Judge Mumbi Ngugi judgment in the High Court and in particular her finding that damages should be paid to those evicted, the Supreme Court ordered the first respondents, the Moi Educational Centre, to pay fourteen families KSh150,000 (just over 1000 euros) each in damages. The government will also pay each family KSh100,000. In return, unless the National Land Commission or the Land and Environment Court are asked to rule on the propriety of the first respondent’s title and find against them, the Moi Educational Centre now hold unimpeached title to very valuable land in Nairobi. That is quite a windfall.

Violent evictions of families from their homes are not episodic and exceptional events. They go to the heart of Kenya’s political economy and its long history of valorising the rights of those who hold private title, however acquired. How far can the courts be relied upon to undo accumulation by dispossession?

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South Africa Has to Heal Its Troubled Past – and the Time Is Now

If there is no material justice and investment in healing the generations of harm enacted onto South Africans, the rot in the country’s wounds will overcome them.

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Social unrest”—though others may prefer “riots and looting,” “food riots,” or “insurrection”—have swept South Africa since Monday. It’s unsettled an already unsettled nation. And as with all South Africa’s heightened moments, our historic fault lines have been re-exposed. Racial and ethnic divisions, class antagonisms, xenophobia, questions of violence and its use. These are some of our wounds that have never been treated. Over the last decades we’ve covered them with patriotic bandages, unity slogans and surface-level performances of a shared national consciousness. But the wounds have opened again now, and as the country bleeds, the rot is open for all to see. Flashing moments tell an incomplete but tragic story of the reality unfolding in our country.

Impoverished communities with limited prospects, rejoice as they leave megastores with stolen food and essential resources. Elderly women are seen taking medication that they otherwise could not afford. A father exits a store with nappies (diapers) for his child. Families that have struggled with eating daily meals suddenly have food for a month.

Elsewhere, in the historically Indian community of Phoenix, an elderly man is surrounded by people from a nearby  informal settlement. He is commanded that he needs to hand over his home, or otherwise will face attacks on his family in the dead of night. In the night, drive-by shootings claim lives as stray bullets shatter family homes.

Armed Indian and white “vigilantes” drive around shooting African people they assume are looters. Hunting them down while recording vicious videos, beating them with sjamboks as the person begs for their lives.

These videos are shared and watched repeatedly across social media, racially charged viewers salivate with a carnal sense of pleasure as one racial group watches the other suffer and bleed.

At least 15 people are killed by armed community members of Phoenix. They blockade roads entering the community, racially profiling people, preventing them from access to functioning supermarkets. Bodies are found in the night. #PhoenixMassacre trends on twitter echoing disgust and outrage at the anti-black sentiment within the South African Indian community.

The home of Thapelo Mohapi, the spokesperson of Abahlali BaseMjondolo, the shack dwellers movement in KwaZulu-Natal that safeguards working-class interests, has his home burnt down on Wednesday morning. Mohapi, like most in Abahlali, is outspoken against ANC corruption and political violence in the country, with Abahlali members often the targets for political killings.

Shacks burnt down in response to the looting. Reports of xenophobic attacks by the rioters. Families terrified as gunshots break their windows. Small community stores torched. Blood banks and clinics ransacked. Essential foods become scarce, gas stations close.

The excitement of people getting access to expensive TVs, furniture, alcohol, and commodities they would not be able to access otherwise. Because in South Africa we know that nice things are reserved for a minority—and you either have to be crazy lucky and gifted, or crazy devious and connected, to escape the poverty cycle.

This is the status quo of our neocolonial, violent and divided country. Every snapshot from the riots reveals a new layer of a tragedy we’re all too familiar with but have made no substantial material effort to address to this point. And now the rot in our open wound has become septic.

In the midst of all this mess and complexity, many are now left trying to make sense of where they stand regarding these riots—with the mask of a shared national consciousness being ruthlessly peeled back — some who thought they understood their political standings are having to rethink their position after being thrust into a violent situation where racial and class perceptions pre-determine their position for them.

Orchestrated or Inevitable?

Acentral question on people’s minds is who is responsible for the unfolding events. How much of it is orchestrated as part of the #FreeZuma campaign that sparked this moment with former President Zuma’s arrest, and how much is simply an overflow from the desperate situation a majority of South Africans find themselves in. The reality is, of course, complex. Reports from activists on the ground and observers indicate the riots are likely made up of multiple forces.

Some are believed to be political agents of the pro-Zuma faction of the African National Congress ANC, using chaos to fight their battle against President Cyril Ramaphosa. These agents are known to have organized the initial demonstrations and are believed by some commentators to continue funding transport for rioters and operating in the background to hamstring the local economy. Some now attribute this orchestrated terror with the targeted burning of key distribution centers, factories, network towers, and trucks.

Others involved are not politically linked to a factional ANC agenda or desire to destabilize the country. They are there because the moment has presented families with access to food under dire circumstances and the opportunity for temporary relief from the dredges of poverty. One may say that their situation is being purposefully manipulated by political agendas, but the material reality of their situation is no less real. Individuals from well-known working class organizations that are strongly anti-ANC in all forms have reported taking part in looting as the moment allowed for sorely needed aid to struggling communities.

And of course, with any mass gathering, there are simply those criminal elements who use the moment with malicious intent, stirred by past and present grudges, looking to impose power and fear on those they see as “other.” Yet, these malicious sentiments exist on both the “sides” of the rioters and those responding to them. It is every person’s right and entitlement to defend themselves, their family, and personal property from harm against malicious forces. But much of this defence and protection of what is dear  has morphed into older desires to harm, dehumanize, and kill those considered “other.” How much of our violence in the name of defence is rooted in the historic rot we’ve left untreated from colonialism, apartheid, and a world that hates poor people?

Military intervention

Many are in support of the President Cyril Ramaphosa’s position that the army be deployed to quell the riots, looting, and violence. They argue for an armed, militant, and potentially lethal response.

Part of this rationale is in response to the signs of orchestration and mobilization by pro-Zuma political forces. As some of the actions show signs of being organized and targeted strikes, they will not subside organically and so the use of intelligence and organized force would be necessary to intervene. This tactical move acts in support of the President Cyril Ramaphosa and preserving the current status quo of South Africa.

The other reason is that the racial conflict between communities has reached such a heightened state that many fear an echo of the Durban Riots of 1949. With armed vigilantes enacting destruction, racial profiling, and vicious killing onto those they brand “looters”—  and the responsive revenge cycles this opens up—there can be no road that does not lead to further death. And right now there is no Steve Bantu Biko and his dear friend Strini Moodley to lead us back on the path towards a more human face.

However, even in the face of this leadership vacuum, military intervention is short sighted, ahistoric, and temporary at best. The wounds are all open now, the military cannot heal, only repress.

Ultimately the scale and intensity of these riots have very little to do with political infighting within the ANC and the tensions between communities could not be set alight if there was not already kindling of unresolved tensions. The material conditions of South Africa indicate that it’s been ripe for mass political uprising for years now. With grants cut under lockdown, youth unemployment over 70%, service delivery a mess or none existent, trust in government, media and political parties at record lows—there seems to be meagre hope for South Africans on the wrong side of the poverty line—and very little to lose.

Whether it’s an orchestrated plot by devious political agendas, a student throwing poop on a colonial statue or an increase in bread prices as was seen in South America—a spark is all that’s needed to set alight a desperate people.

The best case scenario with military intervention this time is further repression of people’s material frustrations. If people die, the situation becomes further inflamed. When the next spark goes off the riots will be more organized, with living memory of the injustices of this moment. And if not organized by our dysfunctional Left, it will be led by reactionary forces. Most dangerous of all is, as with other examples from history, as military forces play a greater role in a country’s internal policing, they become more used to enacting power over its populace, and ambitious autocrats rise up their ranks in military command.

With military intervention, we admit that the violence and death that will be enacted on the working class populace is worth a return to South Africa’s abnormal normal. The violence of this moment simply transferred back to those who held it silently a week ago.

Repression and military enforcement of a violent status quo is not the answer. Material conditions need to change, people need to be fed, grants need to be returned and our septic wounds that have laid open for centuries need urgent attention.

If there is no material justice and investment in healing the generations of harm enacted onto us—and by us—the rot in our wounds will overcome us. And we will become the rot.

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

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They Are Watching You: Israeli-Made Spyware Used to Monitor Journalists and Activists Worldwide

The use of spyware to surveil, harass, and intimidate journalists and activists — and those close to them has become a key activity for many governments worldwide.

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They Are Watching You: Israeli-Made Spyware Used to Monitor Journalists and Activists Worldwide
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In Hungary, Szabolcs Panyi exposed spy intrigue and murky arms deals. In India, Paranjoy Guha Thakurta probed the ties between business and political interests. In Azerbaijan, Sevinj Vaqifqizi caught vote-rigging on tape.

Separated by thousands of miles, these journalists have one thing in common: their governments considered them a threat.

All three were among dozens of journalists and activists around the world whose smartphones were infected by Pegasus: spyware made by Israeli firm NSO Group that is able to secretly steal personal data, read conversations, and switch on microphones and cameras at will.

The attacks were revealed by The Pegasus Project, an international collaboration of more than 80 journalists from 17 media organizations, including OCCRP, and coordinated by Forbidden Stories.

What Does ‘Selected for Targeting’ Mean?

The phones of Panyi, Thakurta, and Vaqifqizi were analyzed by Amnesty International’s Security Lab and found to be infected after their numbers appeared on a list of over 50,000 numbers that were allegedly selected for targeting by governments using NSO software. Reporters were able to identify the owners of hundreds of those numbers, and Amnesty conducted forensic analysis on as many of their phones as possible, confirming infection in dozens of cases. The reporting was backed up with interviews, documents, and other materials.

The strongest evidence that the list really does represent Pegasus targets came through forensic analysis.

Amnesty International’s Security Lab examined data from 67 phones whose numbers were in the list. Thirty-seven phones showed traces of Pegasus activity: 23 phones were successfully infected, and 14 showed signs of attempted targeting. For the remaining 30 phones, the tests were inconclusive, in several cases because the phones had been replaced.

Fifteen of the phones in the data were Android devices. Unlike iPhones, Androids do not log the kinds of information required for Amnesty’s detective work. However, three Android phones showed signs of targeting, such as Pegasus-linked SMS messages.

In a subset of 27 analyzed phones, Amnesty International researchers found 84 separate traces of Pegasus activity that closely corresponded to the numbers’ appearance on the leaked list. In 59 of these cases, the Pegasus traces appeared within 20 minutes of selection. In 15 cases, the trace appeared within one minute of selection.

The strongest evidence that the list really does represent Pegasus targets came through forensic analysis.

Amnesty International’s Security Lab examined data from 67 phones whose numbers were in the list. Thirty-seven phones showed traces of Pegasus activity: 23 phones were successfully infected, and 14 showed signs of attempted targeting. For the remaining 30 phones, the tests were inconclusive, in several cases because the phones had been replaced.

Fifteen of the phones in the data were Android devices. Unlike iPhones, Androids do not log the kinds of information required for Amnesty’s detective work. However, three Android phones showed signs of targeting, such as Pegasus-linked SMS messages.

In a subset of 27 analyzed phones, Amnesty International researchers found 84 separate traces of Pegasus activity that closely corresponded to the numbers’ appearance on the leaked list. In 59 of these cases, the Pegasus traces appeared within 20 minutes of selection. In 15 cases, the trace appeared within one minute of selection.

In a series of responses, NSO Group denied that its spyware was systematically misused and challenged the validity of data obtained by reporters. It argued that Pegasus is sold to governments to go after criminals and terrorists, and has saved many lives. The company, which enjoys close ties to Israel’s security services, says it implements stringent controls to prevent misuse. NSO Group also specifically denies that it created or could create this type of list.

But instead of targeting only criminals, governments in more than 10 countries appear to have also selected political opponents, academics, reporters, human rights defenders, doctors, and religious leaders. NSO clients may have also used the company’s software to conduct espionage by targeting foreign officials, diplomats, and even heads of state.

Based on the geographical clustering of the numbers on the leaked list, reporters identified potential NSO Group clients from more than 10 countries, including: Azerbaijan, Bahrain, Hungary, India, Kazakhstan, Mexico, Morocco, Rwanda, Saudi Arabia, Togo, and the United Arab Emirates.

Journalists and Activists in the Crosshairs

In the coming days, OCCRP and other Pegasus Project partners will release stories highlighting the threat of surveillance through misuse of NSO Group software around the world. But to start with, we will focus on some of the most egregious cases: the use of spyware to surveil, harass, and intimidate journalists and activists — and those close to them.

Among those on the list were multiple close relations of Jamal Khashoggi, the Washington Post columnist who was murdered and dismembered by Saudi operatives in the country’s Istanbul consulate. Forensic analyses show that Khashoggi’s Turkish fiancée, Hatice Cengiz, and other loved ones and colleagues were successfully compromised with NSO Group software both before and after Khashoggi’s 2018 killing. (NSO Group said that it has investigated this claim and has denied its software was used in connection with the Khashoggi case.)

Sandra Nogales, the assistant of star Mexican journalist Carmen Aristegui, was also targeted with Pegasus through a malicious text message, according to a forensic analysis of her phone.

Aristegui had already known that she was a Pegasus target. Her case was featured in a 2017 report by Citizen Lab, an interdisciplinary laboratory at the University of Toronto. Still, “it was a huge shock to see others close to me on the list,” Aristegui told The Pegasus Project.

“My assistant, Sandra Nogales, who knew everything about me — who had access to my schedule, all of my contacts, my day-to-day, my hour-to-hour — was also entered into the system.”

Several reporters in OCCRP’s network were among the at least 188 journalists on the list of potential targets. They include Khadija Ismayilova, an OCCRP investigative journalist whose uncompromising reporting has made her a target of the kleptocratic regime of the country’s president, Ilham Aliyev. Independent forensic analysis of Ismayilova’s Apple iPhone shows that Pegasus was used consistently from 2019 to 2021 to penetrate her device, primarily by using an exploit in the iMessage app.

Ismayilova is no stranger to government surveillance. Roughly a decade ago, her reporting led her to be threatened with compromising videos that she learned to her horror had been shot with hidden cameras installed in her home. She refused to back down, and as a result had the footage broadcast across the internet.

But even after this, Ismayilova was shocked by the all-consuming nature of her surveillance by Pegasus.

“It’s horrifying, because you think that this tool is encrypted, you can use it… but then you realize that no, the moment you are on the internet they [can] watch you,” Ismayilova said. “I’m angry with the governments who produce all of these tools and sell it to the bad guys like [the] Aliyev regime.”

Panyi and his colleague András Szabó, both OCCRP partner journalists in Hungary, also had their phones successfully hijacked by Pegasus, potentially granting their attackers access to sensitive data like encrypted chats and story drafts. As investigative journalists at one of the country’s few remaining independent outlets, Direkt36, they had spent years investigating corruption and intrigue as their country became increasingly authoritarian under the rule of Prime Minister Viktor Orban.

Now they found out that they were the story.

For Panyi, the descendant of Jewish Holocaust survivors, something stung in particular: that the software had been developed in Israel, and exported to a country whose leadership regularly flirts with antisemitism.

“According to my family memory, after surviving Auschwitz, my grandmother’s brother left to Israel, where he became a soldier and soon died during the Arab-Israeli war of 1948,” Panyi wrote in a first-person account of learning he had been hacked. “I know it is silly and makes no difference at all, but probably I would feel slightly different if it turned out that my surveillance was assisted by any other state, like Russia or China.”

The alleged surveillance list includes more than 15,000 potential targets in Mexico during the previous government of President Enrique Peña Nieto. Many were journalists, like Alejandro Sicairos, a reporter from Sinaloa state who co-founded the journalism site RíoDoce. Data seen by The Pegasus Project show Sicairos’ phone was selected as a target for NSO Group’s software in 2017 shortly after his colleague, prominent journalist Javier Valdéz, was shot dead near RíoDoce’s office.

Others on the list were regular people thrust into activism by Mexico’s chaos and violence. Cristina Bautista is a poor farmer whose son, Benjamin Ascencio Bautista, was one of 43 students abducted in Iguala, in the Mexican state of Guerrero, in 2014 and remains missing until this day. The case shook Mexican society to its core and prompted Bautista and other parents to take to the streets in protest, and to assist independent experts in their own investigations.

The vocal stance taken by Bautista and other parents put them directly in the sights of Mexican authorities and Peña Nieto, who denounced the protests as destabilizing the country.

“Oh yeah, they were watching us! Whenever we went, a patrol followed us,” she said.

“They were chasing us.”

A “Natural Tool” for Autocrats

While The Pegasus Project exposes clear cases of misuse of NSO Group’s software, the company is just one player in a global, multi-billion-dollar spyware industry.

Estimated by NSO managers to be worth approximately $12 billion, the mobile spyware market has democratized access to cutting-edge technology for intelligence agencies and police forces that, in years past, could only dream of having it.

“You’re giving lots more regimes an intelligence service,” said John Scott-Railton, a senior researcher at Citizen Lab. “Like a foreign intelligence service in a box.”

Like many private spyware companies, NSO Group’s stock in trade is so-called “zero-day exploits” — previously undiscovered flaws in commercial software that can allow third parties to gain access to devices, such as mobile phones. Pegasus and other top tools enjoy a particular strength: They are often able to infect devices silently, without the user even having to click a link.

Such tools have given governments the edge amid the widespread adoption of encrypted messaging applications, such as WhatsApp and Signal, which otherwise supposedly allow for users to communicate beyond the reach of state surveillance. Once devices are successfully compromised, however, the contents of such apps become readily available, along with other sensitive data like messages, photographs, and calls. Meanwhile, the ubiquity of mobile phone cameras and microphones means they can be easily accessed by spyware clients as remote recording devices.

While The Pegasus Project exposes clear cases of misuse of NSO Group’s software, the company is just one player in a global, multi-billion-dollar spyware industry.

“In order to bypass [encrypted messaging] you just need to get to the device at one or the other end of that communication,” said Claudio Guarnieri, head of Amnesty International’s Security Lab. Pegasus does just that. “Pegasus can do more [with the device] than the owner can. If Signal, for example, encrypts the message… [an attacker] can just record using the microphone, or take screenshots of the phone so you can read [the conversation]. There is virtually nothing from an encryption standpoint to protect against this.”

In fact, there isn’t much anyone can do to protect themselves from a Pegasus attack. Guarnieri is skeptical of applications that claim they are completely secure, and instead recommends mitigating the risks of spyware by practicing good cybersecurity hygiene. “Make sure to compartmentalize things and divide your information in such a way that even if an attack is successful, the damage can be minimized.”

At its heart, The Pegasus Project reveals a disturbing truth: In a world where smartphones are ubiquitous, governments have a simple, commercial solution that allows them to spy on virtually whoever they want, wherever they want.

“I think it’s very clear: Autocrats fear the truth and autocrats fear criticism,” said Scott-Railton of Citizen Lab.

“They see journalists as a threat, and Pegasus is a natural tool for them to target their threats.”

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