Two weeks ago, Uhuru Kenyatta called the country to order to make what I gather was anticipated to be a very consequential address to the nation. When a country is in as much political and economic turmoil as Kenya is, it is understandable that a rare formal presidential address to the nation would be highly anticipated.
It is difficult to say whether it met expectations. It certainly did not overwhelm. I don’t get the sense that the country came out of it with a clearer sense of direction of either politics or economics.
The political highlight was without doubt the dismissal of agriculture Cabinet Secretary Mwangi Kiunjuri. Kiunjuri promptly called a press conference at which he intimated that he’d endured a fair amount of humiliation, and had been pretty much prepared for the dismissal. A master of Gīkūyū orature, he shrugged off the sacking by saying mumagari nī wa njũa igīrī (when you leave home it is wise to carry a spare garment), meaning in politics you need to have a “plan b”. Figuratively, it’s the equivalent of a middle finger.
But the main talking point of the speech was Kenyatta’s directive asking the national Treasury to release Sh500 million to the New Kenya Co-operative Creameries (New KCC) to purchase milk from farmers, and another Sh575 million to revamp two of its processing plants in Kenyatta’s central Kenya political base. This was one of a raft of financial bailouts of various troubled agriculture sub-sectors that Kenyatta said were his plan to put money in people’s pockets.
Kenyatta’s family enterprise, Brookside Dairies is the largest milk processor in Kenya. It achieved this through a string of acquisitions executed since Kenyatta became finance minister and subsequently president. The reason why Kenyatta’s directive is a talking point is because, since he assumed power, Brookside has been taking money out of people’s pockets. When he took office, processors bought milk from farmers at between Sh30 and Sh35, and sold it to consumers at between Sh60 and Sh65, obtaining a margin of about the same, i.e. Sh30 to Sh35. By the end of Kenyatta’s first term, the consumer price had increased to between Sh110 and Sh120 (i.e by Sh55 to Sh60 per half-litre packet), while the producer price remained unchanged, raising the processors’ margin to the Sh75-Sh90 range.
Over the last two years, the squeeze has shifted from consumers to producers. In August last year Brookside reduced the purchase price of milk from Sh30 to Sh25 per kilo. By December, the media reported that farm-gate prices had fallen to Sh20, and to as low as Sh17 in some places.
The dairy farmers’ woes are blamed on milk imports from Uganda. It has been alleged that some of this milk is sourced from elsewhere and passed off as Ugandan. Kenya and Uganda being part of the East African common market, there is little Kenya can do to protect its market from Ugandan products, but transhipment would violate rules of origin and give Kenya reason to restrict Ugandan imports. In response to these allegations, the Kenyan government dispatched a fact-finding mission to establish whether Uganda had the capacity to export that much milk to Kenya. The trade Principal Secretary was quoted saying that not only did the delegation not find any evidence of transhipment, it had established that Uganda’s milk production has increased significantly in recent years.
The reason why Kenyatta’s directive is a talking point is because, since he assumed power, Brookside has been taking money out of people’s pockets
There’s plenty of information in the public domain on Uganda’s growing dairy export industry. A paper published by the Economic Policy Research Centre (EPRC) shows that Uganda’s dairy exports have grown steadily from virtually zero a decade ago to $79m in 2017. We did not need to go to Uganda to know this. According to the EPRC paper, the Kenyatta-owned Brookside Dairies is the third-largest milk processor in the country in terms of installed capacity at 500,000 litres/day (19 per cent) but second in terms of production at 450,000 litres/day (29 per cent). Still, the allegations have degenerated into a trade row. Last week the Ugandan government sent a formal protest note objecting to what it termed illegal seizures of Ugandan milk, and demanding immediate release.
More fundamentally, why the Kenyan market is attracting Ugandan milk has little to do with Uganda’s demand-supply balance, and everything to do with Kenya’s consumer price. As observed earlier, the retail price of processed milk has doubled from Sh65 to Sh120. In Uganda, a litre of processed milk retails at between USh2,800 and USh3,000 which translates to an average of Sh80, i.e. Sh40 per half-litre packet, compared to Sh60 in Kenya. Ugandan producers are not obliged to satisfy their domestic market when a more profitable market is available across the border. If consumer prices had increased at the rate of inflation faced by Kenyan manufacturers, as measured by the producer price index (2.5 per cent per year), the retail price in Kenya today would be in the Sh70-75 range, which is well below the Uganda retail price.
In a competitive market, Uganda should sell milk to Kenya until the profits for producers in both markets are equal. But the consumer prices in Kenya are not a reflection of market forces. They are a reflection of the market power exercised by Brookside. Why Brookside? Why not New KCC and Githunguri Dairy, or collusion between the three? The answer is simple enough. New KCC and Githunguri Dairy are public entities, the former a state corporation, the latter farmer-owned. They have nothing to gain from a fat bottom line as their mandates are to maximise farmers’ earnings. Whether they pay a decent producer price or distribute dividends, the money ends up with farmers.
Why the Kenyan market is attracting Ugandan milk has little to do with Uganda’s demand-supply balance, and everything to do with Kenya’s consumer price
But even if in the place of New KCC and Githunguri Dairy we had purely capitalist enterprises in the same market position, Brookside, as the market leader, would still be the culprit. In the economics of industrial organisation, the branch that informs competition policy, we call a market dominated by a few players an oligopoly. In an oligopoly, the market leader is the price maker. When the market leader raises prices, the weaker players benefit also. You don’t need a conspiracy to get a cartel. Each of the players acting in their self-interest can result in cartel-like behaviour. We call this non-cooperative collusion.
In essence then, the problem of the milk industry is not an agricultural policy one. It is not a trade policy one either. It is a problem of competition policy. Having sanctioned the Brookside acquisitions, the Competition Authority was obliged to keep an eye on the market to ensure that cartelisation did not occur. As noted, normal prices should be in the order of Sh75 a litre, Sh80 at most, compared to Sh120 today. This is prima facie evidence of abuse of dominance.
I am frequently asked, including by people close to Kenyatta, what it is that he, Kenyatta should do to turn around the economy. My answer is invariably is that there is a world of difference between what can be done, and what Kenyatta can do. The reasons are clear. Kenyatta is so severely enmeshed in the conflict between his family’s business and the public interest that there is hardly a sector of the economy in which the required reforms do not conflict with his personal interests.
For the last four years, the economy has suffered the consequences of ill-advised populist interest rate regulation. Kenyatta expressed reservations about the law, but he went ahead and signed it anyway. The banking industry vigorously opposed the law, and as a bank owner, Kenyatta may not have wanted to be seen to be on the side on which his bread is buttered. If Kenyatta had no personal interest, he would have been in a much stronger position to argue against, and veto the law.
Consumer prices in Kenya are not a reflection of market forces; they are a reflection of the market power exercised by Brookside
Two years ago, a sugar import scandal of monumental proportions unfolded. Initial reports pointed to traders of Somali ethnicity who were reportedly repackaging contaminated contraband sugar and passing it off as “Kabras Sugar”, a local brand owned by West Kenya Sugar Company. The government was threatening damnation. So much so that the CEO of the Kenya Bureau of Standards (KEBS) was slapped with an attempted murder charge for allowing the contaminated sugar, said to be laced with copper and mercury, to enter the country. But soon, mountains of sugar, way beyond the capacity of the contraband traders, was discovered in warehouses associated with the owners of the West Kenya Sugar Company, who also happen to be Kenyatta family business associates. It turned out that just before the elections the Government had opened the floodgates and allowed in 990,000 tonnes of duty free-sugar. West Kenya Sugar imported a quarter of it. As soon as this was exposed, the matter died.
The convergence of family and state is best exemplified by Stawi, a mobile phone-based lending platform owned by NCBA Bank—another Kenyatta family enterprise—that is being passed off as a national policy initiative to provide affordable credit to small businesses. Kenyatta himself first spoke of it in his 2019 State of the Nation address, and again in his Mombasa address two weeks ago:
“Measures to enable MSMEs access affordable credit include the recently launched Stawi. This will provide unsecured credit to MSMEs, which, because of their informal nature and lack of collateral securities, had been locked out of the formal credit market. Five commercial banks have set aside 10 billion shillings to be lent to MSMEs at an interest rate of 9 percent per annum, in loan amounts ranging between 30,000 to 250,000 shillings.”
This is sleight of hand, also known in trade lingo as mis-selling. First, the Stawi platform belongs to NCBA, the other four banks are agents. Second, the interest rate of 9 per cent per year, while true, amounts to mis-selling. The true cost of credit is given by the Annual Percentage Rate (APR) which combines both interest and other fees. In addition to the 9 per cent per year interest, there is a facility fee of 4 per cent of the loan amount, a 20 per cent excise duty on the facility fee and a 0.7 percent insurance fee. All in all, these add up to an APR of 14.5 per cent for a one-year loan, 20 per cent for a six-month loan, 31 per cent for a three-month loan and 75 per cent for a one-month loan.
"We’re pleased to see the new scheme, Stawi, under which loans will be made available to SME's at 9%. Our young people and our small scale traders hard work and innovation deserve our support; with the Stawi loans, they’ll get it." ~ @KanzeDena pic.twitter.com/VcoqGMBG20
— State House Kenya (@StateHouseKenya) June 18, 2019
Kenyatta has spoken out against conflict of interest on a number of occasions, including quite recently when he made a big hullabaloo about lawyers who are also senators representing county governors in court. The conflict of interest here is actually tenuous, since all that would be required to avoid it is for the lawyers to recuse themselves if their client’s case comes before the Senate. It remains a profound mystery whether Kenyatta is unaware how egregiously conflicted he is, or it is impunity, or perhaps he suffers from multiple personality disorder. Remarkably, throughout his presidency, no journalist has found it fit to ask Kenyatta this question. It needs to be asked.
Whatever the case, Kenyatta cannot have been unaware that personally wading into the dairy industry was inviting scrutiny of Brookside’s role in the dairy industry mess. That he did so suggests that he may be finally waking up from whatever reverie led him to wonder aloud not too long ago why Kenyans are broke. He may even be finally making the connection between the economic despondency in the country, and the popularity his deputy and now nemesis is enjoying in his central Kenya backyard.
Having sanctioned the Brookside acquisitions, the Competition Authority was obliged to keep an eye on the market to ensure that cartelisation did not occur
And of course, that his administration’s borrowing binge has the government in financial dire straits can no longer be denied. Mr Kenyatta has little to show for the debt. The SGR railway, his flagship project, has become a bugbear that is bleeding the country dry. It costs more and is less efficient than road haulage. The only reason it is running is because importers are forced to use it, gutting the Mombasa economy in the process. Even then, it cannot cover the management fees we are paying the Chinese to run it, let alone service its debt. It is bleeding taxpayers, consumers, importers, business and Mombasa—the only beneficiaries are China and whoever was bribed to build it.
A legacy of economic delinquency is one that Kenyatta cannot be relishing. We can expect him to be increasingly preoccupied with salvaging what he can. He has his work cut out. The government is in negotiations with the World Bank and the IMF for a financial bailout. If that goes through, Kenyatta is likely to spend the rest of his term hemmed in between an IMF straightjacket and his myriad conflicting interests, amidst a brutal vacuous power struggle between his deputy and Raila Odinga, neither of whom, if truth be told, inspire confidence in terms of economic stewardship.
Gakīīhotora nīko koī ūria karīina (one does not adorn for dance without knowing how they will dance) which is to say, as you make your bed, so you must lie on it.
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Haiti: The Struggle for Democracy, Justice, Reparations and the Black Soul
Only the Haitian people can decide their own future. The dictatorship imposed by former president Jovenel Moïse and its imperialist enablers need to go – and make space for a people’s transition government.
Haiti is once again going through a profound crisis. Central to this is the struggle against the dictatorship imposed by former president Jovenel Moïse. Since last year Mr. Moise, after decreeing the dismissal of Parliament, has been ruling through decrees, permanently violating Haiti’s constitution. He has refused to leave power after his mandate ended on February 7, 2021, claiming that it ends on February 7 of next year, without any legal basis.
This disregard of the constitution is taking place despite multiple statements by the country’s main judicial bodies, such as the CSPJ (Superior Council of Judicial Power) and the Association of Haitian Lawyers. Numerous religious groups and numerous institutions that are representative of society have also spoken. At this time, there is a strike by the judiciary, which leaves the country without any public body of political power.
At the same time, this institutional crisis is framed in the insecurity that affects practically all sectors of Haitian society. An insecurity expressed through savage repressions of popular mobilizations by the PNH (Haitian National Police), which at the service of the executive power. They have attacked journalists and committed various massacres in poor neighborhoods. Throughout the country, there have been assassinations and arbitrary arrests of opponents.
Most recently, a judge of the High Court was detained under the pretext of promoting an alleged plot against the security of the State and to assassinate the president leading to the illegal and arbitrary revocation of three judges of this Court. This last period has also seen the creation of hundreds of armed groups that spread terror over the entire country and that respond to power, transforming kidnapping into a fairly prosperous industry for these criminals.
The 13 years of military occupation by United Nations troops through MINUSTAH and the operations of prolongation of guardianship through MINUJUSTH and BINUH have aggravated the Haitian crisis. They supported retrograde and undemocratic sectors who, along with gangsters, committed serious crimes against the Haitian people and their fundamental rights.
For this, the people of Haiti deserve a process of justice and reparations. They have paid dearly for the intervention of MINUSTAH: 30 THOUSAND DEAD from cholera transmitted by the soldiers, thousands of women raped, who now raise orphaned children. Nothing has changed in 13 years, more social inequality, poverty, more difficulties for the people. The absence of democracy stays the same.
The poor’s living conditions have worsened dramatically as a result of more than 30 years of neoliberal policies imposed by the International Financial Institutions (IFIs), a severe exchange rate crisis, the freezing of the minimum wage, and inflation above 20% during the last three years.
It should be emphasized that, despite this dramatic situation, the Haitian people remain firm and are constantly mobilizing to prevent the consolidation of a dictatorship by demanding the immediate leave of office by former President Jovenel Moïse.
Taking into account the importance of this struggle and that this dictatorial regime still has the support of imperialist governments such as the United States of America, Canada, France, and international organizations such as the UN, the OAS, and the EU, the IPA calls its members to contribute their full and active solidarity to the struggle of the Haitian people, and to sign this Petition that demands the end of the dictatorship as well as respect for the sovereignty and self-determination of the Haitian people, the establishment of a transition government led by Haitians to launch a process of authentic national reconstruction.
In addition to expressing our solidarity with the Haitian people’s resistance, we call for our organisations to demonstrate in front of the embassies of the imperialist countries and before the United Nations. Only the Haitian people can decide their future. Down with Moise and yes to a people’s transition government, until a constituent is democratically elected.
Deconstructing the Whiteness of Christ
While many African Christians can only imagine a white Jesus, others have actively promoted a vision of a brown or black Jesus, both in art and in ideology.
When images of a white preacher and actor going around Kenya playing Jesus turned up on social media in July 2019, people were rightly stunned by the white supremacist undertone of the images. They suggested that Africans were prone to seeing Jesus as white, promoting the white saviour narrative in the process. While it is true that the idea of a white Jesus has been prevalent in African Christianity even without a white actor, and many African Christians and churches still entertain images of Jesus as white because of the missionary legacy, many others have actively promoted a vision of Jesus as brown or black both in art an in ideology.
Images of a brown or black Jesus is as old as Christianity in Africa, especially finding a prominent place in Ethiopian Orthodox Church, which has been in existence for over sixteen hundred years. Eyob Derillo, a librarian at the British Library, recently brought up a steady diet of these images on Twitter. The image of Jesus as black has also been popularised through the artistic project known as Vie de Jesus Mafa (Life of Jesus Mafa) that was conducted in Cameroon.
The most radical expression of Jesus as a black person was however put forth by a young Kongolese woman called Kimpa Vita, who lived in the late seventeenth and early eighteenth century. Through the missionary work of the Portuguese, Kimpa Vita, who was a nganga or medicine woman, became a Christian. She taught that Jesus and his apostles were black and were in fact born in São Salvador, which was the capital of the Kongo at the time. Not only was Jesus transposed from Palestine to São Salvador, Jerusalem, which is a holy site for Christians, was also transposed to São Salvador, so that São Salvador became a holy site. Kimpa Vita was accused of preaching heresy by Portuguese missionaries and burnt at the stake in 1706.
It was not until the 20th century that another movement similar to Vita’s emerged in the Kongo. This younger movement was led by Simon Kimbangu, a preacher who went about healing and raising the dead, portraying himself as an emissary of Jesus. His followers sometimes see him as the Holy Spirit who was to come after Jesus, as prophesied in John 14:16. Just as Kimpa Vita saw São Salvador as the new Jerusalem, Kimbangu’s village of Nkamba became, and still is known as, the new Jerusalem. His followers still flock there for pilgrimage. Kimbangu was accused of threatening Belgian colonial rule and thrown in jail, where he died. Some have complained that Kimbangu seems to have eclipsed Jesus in the imagination of his followers for he is said to have been resurrected from the dead, like Jesus.
Kimbangu’s status among his followers is however similar to that of some of the leaders of what has been described as African Independent Churches or African Initiated Churches (AICs). These churches include the Zionist churches of Southern Africa, among which is the amaNazaretha of Isaiah Shembe. Shembe’s followers see him as a divine figure, similar to Jesus, and rather than going to Jerusalem for pilgrimage, his followers go to the holy city of Ekuphakameni in South Africa. The Cameroonian theologian, Fabien Eboussi Boulaga, in his Christianity Without Fetish, see leaders like Kimbangu and Shembe as doing for their people in our own time what Jesus did for his people in their own time—providing means of healing and deliverance in contexts of grinding oppression. Thus, rather than replacing Jesus, as they are often accused of doing, they are making Jesus relevant to their people. For many Christians in Africa, therefore, Jesus is already brown or black. Other Christians still need to catch up with this development if we are to avoid painful spectacles like the one that took place Kenya.
In Magufuli’s Shadow: The Stark Choices Facing Tanzania’s New President
One immediate concern is what steps Hassan will take on the pandemic, and whether she will change direction.
The sudden death of Tanzania’s President John Pombe Magufuli has thrown the East African nation into a period of political uncertainty.
Vice-president, Samia Suluhu Hassan, has been sworn in as his successor, making her Tanzania’s first woman president.
The transition is all the more challenging given the major rupture – both political and economic – caused by Magufuli’s presidency. Magufuli, who won a second term in October 2020, dramatically centralised power and pursued an interventionist economic policy agenda. He courted controversy on a number of fronts, most recently, by claiming that Tanzania – contrary to mounting evidence – was Covid-free.
Hassan has called for unity and counselled that now is not the time to look at what has passed but rather to look at what is to come.
Despite the 61-year-old leader’s forward-looking stance, questions remain about how Magufuli’s legacy will shape her time in office.
The authoritarian turn
Magufuli oversaw the marginalisation of opposition parties and a decline in civil liberties. His first term was defined by heightened intimidation and violence against opposition leaders, including disappearances and physical attacks.
Thanks to five years of repression, the October 2020 general elections saw the opposition all but wiped out of elected office. The ruling Chama Cha Mapinduzi now controls all local government councils. It also holds 97% of directly elected legislative seats, up from 73% in 2015.
But Magufuli’s authoritarian tendencies were not unprecedented in Tanzania. For instance, the rule of his predecessor Jakaya Kikwete was also marred by human rights abuses as well civil society and media repression. Kikwete also cancelled Zanzibar’s 2015 election due to a likely opposition victory.
It remains to be seen whether Hassan will adopt a more liberal approach, loosening restrictions on opposition parties, the media and civil society. Even if she does, the damage will take time to repair. Opposition parties, for instance, may well struggle to regain their strength. Among other setbacks, they have lost almost all local elected representatives – a core element of their organisational infrastructure built up painstakingly over decades.
Centralising power in the party
Another key pillar to Magufuli’s legacy is the centralisation of power within the Chama Cha Mapinduzi.
In the early years under founding president Julius Nyerere, Tanzania’s ruling party was dominated by the president and a hierarchy of appointed state and party officials. But, following economic liberalisation in the 1980s and Nyerere’s retirement from politics, the party became steeped in factional rivalries. These were spurred by new political alliances and an emerging private sector business elite.
This factionalism reached its height under Kikwete amid accusations of widespread corruption. Magufuli’s nomination as party presidential candidate only occurred because the rivalry among these factions left him as the unexpected compromise candidate.
Once in office, though, Magufuli quickly signalled he would be nobody’s puppet. He used his position as ruling party chairman to create a “new” Chama Cha Mapinduzi. This involved breaking with party heavyweights, including Kikwete, suppressing factional organising, and consolidating his own support base.
Magufuli’s new base was a cohort of freshly appointed party officials as well as civil servants and cabinet ministers. His loyalists likened these changes to a revival of Nyerere’s Chama Cha Mapinduzi. But, in our view, the comparison is misleading.
Like Magufuli before her, Hassan will be taking office – and party leadership – without her own political base. She will also have to contend with revived factional manoeuvring as sidelined groups try to regain an upper hand.
Hassan could align with a loyal Magufuli faction, which includes influential figures within the party. But, early indications suggest she intends to follow the advice of “party elders”, notably Kikwete. The former president reportedly attended the party’s most recent central committee meeting on Hassan’s invitation.
Aligning herself with Kikwete will likely lead to the reemergence of the internal factional rivalries that characterised the former president’s tenure.
Implications for economic policy
If president Hassan does continue to take a political steer from Kikwete, one likely outcome is that there will be a change in economic policy. In particular, a return to growth that’s led by a more business-friendly approach to the private sector.
Calls are already being made for such a course of action..
A careful reassessment of the Magufuli era is needed to guide future policymaking.
Magufuli used his control over the ruling party to pursue an ambitious policy agenda. This was also linked to his political project of centralising power.
Although this trend actually began under Kikwete, Magufuli accelelrated a move towards more state-led investment. Under his leadership, both state-owned and, increasingly, military-owned enterprises were offered strategic contracts.
Many state enterprises remained cash-starved, relied on government financial support, and registered losses.
Alongside state investment, the president also sought to discipline private sector actors. Some observers suggest that this led to more productive investment, notably by domestic investors. But others point to renewed crony capitalist ties.
Magufuli’s most high profile corporate battle was against Canadian-owned Barrick Gold and its former subsidiary, Acacia Mining. From the two, he demanded USD$190 billion in tax arrears and a renegotiation of operating terms.
Many saw this resource-nationalist approach as an inspiration and a model for African countries seeking to take greater control of their mineral wealth. But in the end – partly due to externally imposed legal and economic constraints – Magufuli walked back on some of his demands. Instead he opted for cooperation rather than confrontation.
He negotiated a joint venture in which Barrick took a majority stake of 84% and Tanzania the remaining 16%. Key elements of the nationalistic mining legislation passed in 2017 were also reversed.
On the plus side gold overtook tourism as Tanzania’s biggest foreign-exchange earner. In addition, some small-scale miners saw their livelihoods improve. Results were more mixed elsewhere, especially for Tanzanite miners in the country’s north.
Ultimately, Magufuli leaves behind a mixed economic legacy. It combines misdirected authoritarian decision-making with positive efforts to pursue an active industrial policy. Reining in unproductive domestic investors and renegotiating adverse contracts with foreign investors were part of this agenda.
There is a risk, given this complex mix, that Tanzania’s policymakers may learn the wrong lessons from his presidency, leading back to the flawed model existing before.
The pandemic and beyond
One immediate concern is what steps Hassan will take on the pandemic, and whether she will change direction.
Whatever she does, the health emergency and associated economic crisis will likely define her presidency. It could indeed define the economic trajectory of the African region in years to come.
Both Kikwete and Magufuli ruled through an economic boom period. Commodity prices were high and access to international finance was fairly easy. This gave them latitude to choose between various development approaches.
If Tanzania reverts to the status quo of the Kikwete years, the risk is a reemergence of rent-seeking but without the same highly favourable economic growth conditions. Indeed, as external conditions worsen, Hassan may find her options far more limited.
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