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Turnover Tax: Days of Extortion, Days of Revolt

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Informal micro and small businesses are being unfairly targeted by a new tax that is considered by many as extortionist and punitive. How can the government morally justify a tax on a sector it has done little to assist? Will the new tax force these businesses to close down or to revolt?

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Turnover Tax: Days of Extortion, Days of Revolt
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Our government has decided to extort money from the smallest businesses and is trying to make a virtue of it. Imposing the 3 per cent turnover tax (TOT) on informal micro and small businesses is monstrous, and an insult to poor Kenyans. Though legal, TOT is IMMORAL. I echo the prophetic declaration: “Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their right and withhold justice…” (Isaiah 10:1 NIV)

The micro and small-scale businesses, which include kiosks, small grocery stores, hair salons and small market traders (generally those at the bottom tier of the informal sector) now have to pay TOT. TOT is a new tax demanded of any resident person whose turnover from business does not exceed or is not expected to exceed Sh5,000,000 ($50,000) during any year of income. It will be payable from 1st January 2020. This tax rate is on the gross sales/turnover and is a final tax.

Mrs. Elizabeth Meyo, the Commissioner of Domestic Taxes at the Kenya Revenue Authority (KRA), states that “from January 2020, if one operates a salon, butchery, or grocery store, you will be required to declare your sales online and pay the taxes on the 20th of each month.” And for one to get a business licence from one’s county government, one will have to pay an extra 15 per cent of the permit fees to KRA as presumptive tax. In complying to these new demands, Mrs. Meyo further claims, “the business owners will have fulfilled their patriotic duty for a better Kenya”.

Various economic findings acknowledge the substantial contribution of the informal sector to GDP in most developing countries. The informal sector is one of the biggest employers in Kenya, and accounts for over 80 per cent of employment opportunities. It is a shame that attention is turning to this sector only for their moolah, and to bridge the gap resulting from dwindling revenue from the formal sector. According to a Kenya National Bureau of Statistics survey published in 2016, the monthly expenditure on salaries and wages for unlicenced micro small and medium enterprises (MSMEs) was Sh9 billion, which translates to 25 per cent of total outlays a piece.

The neglected informal sector

The colonial market design continues to define the contours of our economy, which conditions us to think of the informal sector as inferior to the formal sector. We still perceive it as “traditional”, marginal or peripheral, having no links to the formal economy and making no contribution to modern industrial development. We have therefore neglected this sector.

Some economists have argued that the informal sector is a dead-end for a pool of labour comprising workers who could not gain entry into the preferred formal sector. Others, like Jeffery Sachs, have even gone to pronounce the informal sector’s obituary, stating that it would cease to exist once Kenya achieves sufficient levels of economic growth and industrialisation.

The informal sector is one of the biggest employers in Kenya, and accounts for over 80 per cent of employment opportunities. It is a shame that attention is turning to this sector only for their moolah, and to bridge the gap resulting from dwindling revenue from the formal sector.

Others see the potential of the informal sector’s small businesses. In his book, The Mystery of Capital (2001), the Peruvian economist Hernando de Soto views these informal businesses as a sign of entrepreneurial dynamism, a real force in the market. They could also be useful in an industrial take-off due to their resilience and ability to withstand market shocks over the long haul, as Shem Watako observed in his doctoral studies of micro and small businesses in Kariobangi.

This hubris in the informal sector has got the taxman’s attention. But the challenge is in how they will implement the TOT. Mrs Meyo identifies this difficulty while responding to why Kenya resorted to TOT for small businesses. She explained that “lack of formal structures and a tax framework that suits the [informal] sector have been major drawbacks in the taxman’s quest to tap revenue from this sector”.

The ethical reasoning of those calling for micro and small-scale businesses to pay taxes as demanded is implausible because it does not raise the second order question. Is it moral to make these demands on the poorest of Kenyan businesses? Is it moral to treat the poor with partiality when the new tax regime would disenfranchise them?

A turnover tax is like a sales tax or a value-added tax (VAT), with the difference being that it taxes intermediate and capital goods. It is on an ad valorem basis (based on the value of the good in question, rather than being flat taxes), applicable to a production process or stage. TOT makes the poor pay another indirect tax, while those whose turnover exceeds Sh5 million pay direct tax, which is a better tax plan for their businesses.

Let us consider a hypothetical case of Nyamulu Beauty  Salon, a business run by Achieng’ in Kariobangi, a low-income area of Nairobi, to illustrate this point. With her revenue turnover of Sh100,000 for January 2020, she would enlist for TOT.

NYAMULU BEAUTY SALON, KARIOBANGI TRADER SCENARIO

ITEM REVENUE/COST GOVT TAXES &LEVIES  
Revenue 100 clients @ 1000                  100,000    
Less cost      
Electricity                    (5,000) VAT +Levies                (901)
Supplies (oils, hair pieces, etc.)                  (30,000) VAT @16%            (4,800)
Rent for stall                  (12,000) Rent Tax @10% Incl            (1,091)
Casual workers 2 @500 a day                  (30,000)    
Mshwari fees[1]                    (5,850)    
County license                    (1,250) county license            (1,250)
Operating Trade Profit                    15,900 Total Taxes & Levies            (8,042)

Assumptions

VAT is standard rated for all goods and services

SCENARIO 1 -TOT
Operating trade profit                    15,900    
Less Turnover Tax                    (3,000) Total Taxes & Levies          (11,042)
Net Profit                    12,900   11.04%

 

SCENARIO 2- Personal Income Tax (PIT)
Trade Profit                    15,900    
PIT -After Relief                          (362) Total Taxes & Levies            (8,404)
Net Profit                    15,538 Effective Tax Rate 8.4%

 

SCENARIO 3 Personal Income Tax and VAT Registered[2] (PIT + VAT registered)
Operating Trade Profit                    15,900    
Add-Input VAT recovered      
Electricity                            664    
Supplies                       4,800    
Net Profit/Taxable Income                    21,364    
PIT – After Relief                    (1,182) Total Taxes & Levies            (3,760)
Net Profit                    20,182 Effective Tax Rate 3.76%

Scenario 3 encourages small traders to register for VAT, which is passed through to consumers; the net effect is increased transparency and increased VAT collection for KRA.

TOT PIT PIT +VAT Reg
Profit                  12,900                  15,538              20,182
Effective Taxes                  11,042                      8,404                  3,760
Effective Taxes% 11.04% 8.4% 3.76%

An alternative tax plan to TOT would give a different result. If the above scenario described her business, then under scenario one, where she paid TOT, her profit would be Sh12,900. Under scenario two, where she pays personal income tax, her profit would be Sh15,538. And if she were registered for VAT and also pays PIT, she would have made profit of Sh20,182.

The individual tax plan would, therefore, be more favourable to the poor income business groups than the TOT. Notice also that her business has contributed indirectly to the government’s revenue by more than Sh8, 042. Then, if subjected to the TOT of Sh3,000, she would have contributed Sh11,042 to the government coffers.

Is it moral for a tax regime to erode the business capital of the poor?

The start-up capital of small businesses usually comes from family resources. This tends to limit the size of the businesses, the number of workers they hire, and the level of profits they generate. So they have a limited amount available to reinvest.

In 2016, the Kenya National Bureau of Statistics found that licenced micro establishments reported spending 45.3 per cent of their net income on investments, either as reinvestment or investing in new businesses and investment in agriculture, while expenditure on household and family needs accounted for 44.5 pervcent. In 2016, small and medium establishments spent a significantly large part of their net income on investment, at 63.4 per cent and 69.7 per cent, respectively.

The erosion of capital from small business via the TOT will delay their growth. Rather, by allowing them to grow capital we would help debunk the notion held by some, including the International Labour Organisation (ILO), that these businesses are doomed to remain small. Yet a significant number of entrepreneurs in the informal sector earn more, on average, than low-skilled workers in the formal sector, according to some studies.

It is immoral to deny the poor a fair chance to compete in the market by imposing a tax on their businesses.

Governments have used taxes to shut out a section of the economy. N. Cheeseman and R. Griffiths (2005)[3] point out that turnover taxes can also be punitive when designed to create a disincentive for buying particular products. They say that environmental regulations sometimes encourage this practice.

Despite the expansive nature of the informal sector, aiming at the bottom end of the pyramid is suspect. We must keep in mind that the current regime is struggling with a debt burden that is uncreative and evil. TOT could be an attempt to cut off informal sector traders from the market. There are 1.3 million micro and small enterprises in Kenya, which, according to a government survey, employed about 2.4 million people – 17 per cent of the total workforce in Kenya – in 2009. They were engaged in the following: close to two-thirds (64.1 per cent) of all enterprises were in the trade sector; retailing made up 62 per cent of all trading in Kenya; manufacturing comprised 13 per cent, while services accounted for 15 per cent.

It is immoral for the government to burden the poor.

In a liberal democracy, argues Prof. Nicholas Wolterstorff of Yale Divinity School, the state should act impartially when distributing burdens and benefits to its citizens. Our government is absent in the lives of poor citizens because of skewed development priorities. The poor live in squalour with children attending overcrowded schools. They have dismal access to healthcare and are the main users of public transport on what is left of roads.

But the government now finds it expedient to tax these businesses operating on the margins of our nation, either in the slums of our cities and towns or in the rural areas. Yet it is through their businesses that low-income households have managed to improve their lot, not through any government subsidies or incentives.

There are 1.3 million micro and small enterprises in Kenya, which, according to a government survey, employed about 2.4 million people – 17 per cent of the total workforce in Kenya – in 2009.

We can use taxes for the public good, to even out the inequalities in society and to provide essential services to all citizens. Eric Nelson, a Harvard professor, explains the idea that the state should coercively maintain an egalitarian distribution of property because it is the business of the state to engage in the redistribution of wealth through taxation, thus ensuring the welfare of the poor; this idea is the genesis of welfare states in many European countries.

Forcing a blanket tax without considering the business conditions of payees is reminiscent of the colonial administration’s hut and poll tax of the 1920s. Then, local leaders and community representatives defended their people against the colonial extortion. Responding to the tax demands, Luo leaders in Nyanza consulted and convened a a general meeting at Lundha in Gem on 23 December 1921. About 9,000 people attended from all parts of Nyanza to discuss the hut tax. During the meeting, Chief Ogada Odera of Gem in Central Nyanza lamented: “As regards our taxes, they used to be 3 shillings. Mr John Ainsworth [the Nyanza Provincial Commissioner in Kisumu from 1906] told us that the amount would be increased to 5 shillings. We agreed. The government then increased it to 8 shillings. It is very heavy. Besides, we do not want our women taxed.”

Forcing a blanket tax without considering the business conditions of payees is reminiscent of the colonial administration’s hut and poll tax of the 1920s.

Chief Ogada made a perceptive comment: “As regards the word colony, the government came here and found us occupying the land and now it calls us ‘wasumbni’ [their slaves].”

Most commentators on TOT have sided with the government’s position and made a virtue of the extortion of poor businesses by calling the tax fair, patriotic, and easy to compute and complete. I think they are misguided. Kamotho Waiganjo reflected this distorted thinking when he commented in the Standard:  “But the government was getting no tax benefit from these businesses…those who operate in the formal sector, and who are therefore in the taxman’s spotlight…cough up 30 per cent of annual profits as tax…businesses in the informal sector means that many of the operators in this expansive sector escape the taxman’s dragnet. Not anymore.”

This assumption – that the poor in the informal sector churn out a considerable volume of revenue but do not contribute to the tax pool – is erroneous. TOT is an indirect tax on businesses and not a tax based on income from business profits. Informal sector businesses already pay other indirect taxes that are levied on fuel, electricity, VAT on their goods and rent taxes collected from rental income. Shouldn’t their cost of goods, business expenses, and other costs also be considered, as they are with formal businesses?

Most commentators on TOT have sided with the government’s position and made a virtue of the extortion of poor businesses by calling the tax fair, patriotic, and easy to compute and complete. I think they are misguided.

Some argue that the cost of compliance is low and that all that these small businesses need to do is record their sales. Those paying turnover tax will not need to worry about tracking their expenses; their tax is only on turnover. They say keeping proper business records will benefits business owners because proper records would help them evaluate their business performance, monitor purchases and sales, and make crucial business decisions.

However, the consequences of eviscerating small businesses would be catastrophic owing to sector’s significance in the economy. It may arouse two major reactions from the poor:

First, if the small businesses sense extortion, they may disappear into thin air. These businesses are supersensitive to extortion by the authorities and would hibernate, adjusting their operations till conditions change. The damage in the wake of their disappearance could be devastating. Mr. Francis Atwoli, the Secretary-General of the Central Organisation of Trade Unions (COTU), warned that further taxation on small and medium businesses will not only destroy the fastest growing sector of the economy but also render many Kenyans jobless.

The 2016 Kenya National Bureau of Statistics survey shows that approximately 400,000 micro, small and medium enterprises do not celebrate their second birthday. Few reach their fifth birthday, leading to concerns about the sustainability of this vital sector.

Second, if poor business owners interpret this tax as oppression, they will revolt. Implementation of TOT will conjure up the pain of the colonial era. The colonial hut and poll taxes became a heavy burden on the people of Kenya in the 1920s. B A Ogot[4] (2009:772) observes that it was made worse by the method of collection, which was ruthless and arbitrary. In Nyanza, the colonial regime collected the hut tax from all huts in a kraal, including the cattle sheds. When many people refused to pay these taxes, the colonial authorities, including chiefs and tax clerks, resorted to brutal methods of collection, ordering policemen, chiefs and sub-chiefs to raid villages, set houses on fire, and confiscate property or food stuff such as grains, bananas and cassava.

Since TOT will eat into the livelihood of these business owners, they will revolt. But the authorities will crush their revolt due to their lack the organisational capacity, unlike the UK’s anti-poll tax groups of 1990. Introducing an unpopular “poll tax” is credited for forcing Mrs. Margaret Thatcher out of office in November 1990. The Green Paper of 1986, Paying for Local Government, proposed the poll tax, which charged a fixed tax per adult resident for the services provided in their community, hence the term poll tax. It was a change from payment based on the worth of one’s house to a resident individual. The tax was, therefore, criticised as being unfair, and needlessly burdensome on those who were less well-off. What followed were protests and riots that prompted the abolishing of the tax following the change of government in November 1990.

What should KRA do with poorer businesses?

The government and the KRA, the implementing tax collection authority, can act morally and avoid hurting small-scale businesses. They can make it a priority to rationalise the informal sector rather than wipe it out through harsh tax policies.

Turnover tax, as currently enacted, is elective. Therefore, qualifying small businesses can opt to register for the standard tax system. This move would allow them to be recognised like other businesses. And with sound records, they may take advantage of comprehensive inclusion rules and a reduction process that requires maintaining proof of expenditure. We should make efforts in aiding small-scale businesses to maintain proper business records and wean them into an alternative tax regime.

The government and the KRA, the implementing tax collection authority, can act morally and avoid hurting small-scale businesses. They can make it a priority to rationalise the informal sector rather than wipe it out through harsh tax policies.

This government should heed the words of Hubert Humphrey, the former US Vice President, who on November 1, 1977, said: “The moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life, the sick, the needy and the handicapped.”

The tinders are there waiting for something to ignite them. If the poor interpret TOT as extortion, we may as well have ushered in days of revolt.

 

[1] Trader uses Mshwari for working capital, interests at 7.5% per month.

[2] Allow Voluntary registration for traders who are below the threshold for compulsory VAT registration.

[3] Cheeseman, N., & Griffiths, R. (2005). Increasing Tax Revenue in Sub-Saharan Africa: The Case of Kenya. Oxford Council on Good Governance, Economy Analysis, 6.

[4] Ogot BA. 2009: A History of the Luo speaking people of Eastern Africa. Kisumu Kenya Anyange press ltd.

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Rev. Canon Francis Omondi, is a priest of The Anglican Church of Kenya (1998), serving as an attached clergy in the All Saints Cathedral Diocese, Nairobi. Was made Canon of Kampala Diocese in the Anglican Church of Uganda (2008). He is an Adjunct Lecturer at St. Paul’s University, Limuru, Kenya, and International Director of The Sheepfold Ministries.

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Is Poverty a Political Choice?

Philip Alston, the outgoing UN special rapporteur on extreme poverty and human rights, says that international development organisations got it all wrong: not only are more people likely to be extremely poor in the next decade, but they are likely to remain extremely poor for the rest of their lives because “poverty is a political choice”.

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Is Poverty a Political Choice?
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Before the outbreak of the coronavirus pandemic, forecasters had been predicting that the world was becoming a better place: more people were being lifted out of poverty; more children were enrolled in school; fewer women were dying in childbirth; the internet was changing the lives of communities in the remotest corners of the planet; and if all went according to plan, and with adequate investment in the right science, life-threatening diseases would be a thing of the past.

International development experts and organisations have since at least the 1990s being gathering data to show positive trends in the state of the world’s people. While grim realities often surface, such as the fact that more people today suffer from depression and anxiety than ever before, the general view is that while things are not good for a large chunk of humanity, they will eventually get better for everyone – provided there are sufficient funds and investments (often couched in the language of aid) to ensure that everyone inhabiting this planet leads a reasonably healthy and productive life.

An overriding assumption made by these experts and organisations is that once a country achieves a certain level of per capita income and reduces poverty to single digit figures (i.e., becomes “developed”), issues such as healthcare and education will take care of themselves. But, as has become alarmingly evident in the United States’ COVID-19 infection and mortality rates, wealth alone cannot guarantee good quality public health.

The United Nations and financial institutions like the World Bank have made it their mission to eradicate poverty. Heads of state meet every year at the UN General Assembly to discuss their countries’ progress in various human development indicators, including poverty levels. The goal of ending poverty is renewed every decade or so (remember the Millennium Development Goals of 2000 that morphed into the Sustainable Development Goals in 2015?) but the poor, as they say, will always be with us.

What’s more, now that we have COVID-19, all the gains of the past decades are likely to be reversed. Not only are poverty levels set to increase with rising unemployment, but inequality levels will most likely soar worldwide.

However, before this pandemic, did we really see the progress that international development organisations claimed had been achieved? Or were the statistics plain wrong?

Dodgy statistics

In a highly critical report released early this month, Philip Alston, the outgoing UN special rapporteur on extreme poverty and human rights, says that international development organisations got it all wrong: not only are more people likely to be extremely poor in the next decade but they are likely to remain extremely poor for the rest of their lives (with or without the impact of COVID-19) because “poverty is a political choice” – the result of “longstanding neglect of extreme poverty and the systematic downplaying of the problem by many governments, economists, and human rights advocates”.

In fact, according to Alston, contrary to “over-optimistic assessments”, there has only been “a slight decline in the number of people living in poverty over the past thirty years””

Alston’s scathing final report to the UN Human Rights Council’s forty-fourth session spells out in unflinching detail how the World Bank duped the world into believing that poverty lines across the world were dropping. The report says that the current international poverty line (IPL) is derived from an average of national poverty lines adopted by some of the world’s poorest countries, but its value (US$1.90 purchasing power parity per day) is “explicitly designed to reflect a staggeringly low standard of living, well below any conception of a life with dignity”.

“Almost all of these celebratory accounts rely one way or another on the World Bank’s international poverty line (IPL), under which the number in extreme poverty fell from 1.895 billion in 1990 to 736 million in 2015, and thus from 36 to 10 percent of the world’s population”, says the report. However, “escaping poverty” is not the same as enjoying an adequate standard of living that includes access to healthcare and education. The report proposes abandoning the IPL in favour of a more nuanced and accurate portrayal of poverty.

In 2014, the Standard Bank Group’s researchers made a similar assessment. Their research debunked the myth that Kenya is an emerging economy set to become a robust middle-income country by 2030. The Group’s research showed that – contrary to optimistic projections by Kenya’s Vision 2030 enthusiasts – Kenya still had a long way to go before it is could be classified as middle-income.

According to the Group’s report, only 4 per cent of Kenyan households fell into the middle class category that year, which the Group placed as those that had an income of roughly between Sh60,000 ($600) and Sh300,000 ($3,000) a month. Using this definition, the vast majority of the country’s households – a staggering 92 per cent – were considered low income i.e. those that earned under Sh40,000 ($400) a month. These figures were validated by an Ipsos Limited survey that showed that 93 per cent of Kenyan adults earned less than Sh40,000 a month and 43 per cent earned less than Sh10,000 ($100) a month.

These statistics fly in the face of African Development Bank figures that place Africa’s middle class as those that earn between $4 and $20 a day, or between about Sh12,000 and Sh60,000 a month.

Anyone living in Kenya, where the cost of living is extremely high and where there are very few free or subsidised services, knows that if you earn Sh12,000 a month, you are definitely not middle class, and that if you earn Sh60,000 shillings a month, you are really struggling to pay for food, rent and school fees, and are more likely to live in a slum than in a middle class neighbourhood. Yet, it is these kinds of figures that international financial institutions use to elevate countries to middle-income status.

Alston is also sceptical of the UN’s Sustainable Development Goals (SDGs), which he says are pegged on economic growth and private sector funding. (The SDGS, adopted in 2015, are a set of 17 goals, including eradicating poverty, achieving gender equality, combatting climate change and promoting sustained inclusive and sustainable economic growth by 2030.)

“Instead of promoting empowerment, funding, partnerships, and accountability, too much energy surrounding the SDG process has gone into generating portals, dashboards, stakeholder engagement plans, bland reports, and colourful posters. Official assessments are rarely critical or focused, and they often hide behind jargon”, he says.

He adds that the strategy to achieve the SGDs is focused on privatisation, which is problematic because privatisation often prevents the poorest and the most vulnerable from gaining access to services. In addition, the SDGs underplay the role of governments, which is “often relegated to insuring private investments”. Alston’s critique reflects the neoliberalism that has pervaded the development sector since the 1990s when privatisation and the freeing of markets were considered the solutions to ending economic stagnation and poverty.

Statistics, as Alston illustrates, often conceal more than they reveal. It all depends on who is computing them and for what aim. While statisticians and demographers will claim that their science is neutral, and based purely on verifiable numbers, carefully crafted formulas and accurate calculations, sceptics have wondered whether numbers tell the whole story.

In addition, quite often it is difficult to tell which variable impacted which outcome. Are low maternal mortality rates an indication of women’s equality in society or merely a reflection of better healthcare? Are urban growth rates a reflection of levels of industrialisation or do some urban areas grow spontaneously? Do high literacy rates and low poverty levels correlate with higher rates of happiness?

Creating just and happy societies

Interestingly, these were the questions that bothered King Jigme Wangchuk of Bhutan nearly fifty years ago when he created the Gross National Happiness Index in 1972, and declared that “if the government cannot create happiness for its people, there is no purpose for the government to exist”.

The four key pillars of this index are equitable and sustainable socio-economic development, preservation of cultural values and heritage, conservation of the natural environment and good governance. Economic growth does not feature high in Bhutan’s happiness index because the kingdom’s policymakers consider spiritual and emotional well-being far more important than GDP, which is considered an inadequate tool to measure other intangible – but invaluable – types of wealth, such as culture and nature.

Bhutan has long acknowledged that economic growth without social justice increases levels of unhappiness in society. This reality has been supported by more recent research that shows that highly unequal societies also tend to be unhappy societies, with high levels of dysfunction.

In a ground-breaking study published a few years ago, epidemiologists Richard Wilkinson and Kate Pickett found that levels of mental illness within a society were related to its level of inequality. In the Unites States, one of the most unequal societies in the world, a quarter of the population suffers from some form of mental illness, while in the more egalitarian Japan, less than 10 per cent do. Germany, Belgium and the Netherlands also have less income inequality and less prevalence of mental illnesses, perhaps because these countries invest more in social welfare programmes than others.

In their book The Spirit Level: Why Greater Equality Makes Societies Stronger (2009), Wilkinson and Pickett show how highly unequal societies tend to produce narcissistic individuals – people who are excessively preoccupied with themselves and place a lot of importance on individual success (which could explain the Donald Trump phenomenon).

The epidemiologists also found that in highly unequal countries, people tend to be physically and psychologically unhealthy as well. Obesity, depression and drug addiction are more common in unequal societies. In such societies, homicide and other criminal behavior are also more prevalent.

Because unequal societies tend to produce people prone to violence and crime, they are also fearful. Hence they tend to build gated communities and protect themselves with guns or private security. People thus become more distrustful of each other and lose their sense of community, which increases anxiety levels.

The authors say that instead of curing mental illness through increased use of drugs and psychiatric services, countries should look at making their societies more equal through policies that reduce the income gap and that build people’s resilience.

This echoes the claim that economic growth alone cannot deliver just, cooperative and healthier societies. China’s cities, for example, have become unliveable due to high levels of air pollution because China decided that growth was more important than environmental protection. China also failed to contain COVID-19 in time, which led to it becoming a pandemic, which suggests that the country still has a lot of work to do in the area of public health.

In the United States, shootings in schools and other public places have become more common, perhaps because the attackers feel disconnected from their world. In Kenya, we are building high-rise apartments for the rich but not a single public park has been built since the colonialists left. We are building more roads, but not expanding pavements or bicycle paths. Meanwhile, before the COVID-19 lockdown, motorists in Nairobi were spending more time in traffic than with their families at home.

Inequality was already out of control before the pandemic hit early this year. According to an Oxfam report released in January, in 2019, only 2,153 people had more wealth than 4.6 billion people, 60 per cent of the world’s population. In addition, “the richest 22 men in the world own more wealth than all the women in Africa”.

According to the World Inequality Report 2018, 50 per cent of the world’s population owns less than 2 per cent of the world’s wealth while 40 per cent of the world’s population (the global middle class) owns less than 30 per cent.

Such depressing figures are set to get grimmer in the near future. According to Alston, COVID-19 is projected to push more than 70 million additional people into extreme poverty, and hundreds of millions more into unemployment and poverty.

Alston says that poverty and inequality can only be eradicated if governments invest in social protection for citizens and involve the poor in policymaking. Governments must also take charge of service provision instead of relying mainly on the private sector.

Extreme poverty must be understood as a violation of human rights. “Protestations of inadequate resources are entirely unconvincing given the determined refusal of many governments to adopt just fiscal policies, end tax evasion, and stop corruption”,says Alston.

Alston concludes his report by stating: “Poverty is a political choice and will be with us until its elimination is reconceived as a matter of social justice. Only when the goal of realizing the human right to an adequate standard of living replaces the World Bank’s miserable subsistence line will the international community be on track to eliminate extreme poverty.”

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The Coronavirus Pandemic: A Breath of Life Into the Struggle for the Implementation of the 2010 Constitution?

The pandemic has hastened the national discussion on the formation of alternative political movements and leaderships that will guarantee the national peace that the elite have shown themselves to be incapable of providing.

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The Coronavirus Pandemic: A Breath of Life Into the Struggle for the Implementation of the 2010 Constitution?
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My governor friend and I were discussing the implementation of the 2010 Constitution. He used a metaphor to speak about the progress made thus far: the constitution gave birth to a beautiful child destined to grow and transform all the ideological, social, economic, cultural, spiritual and political aspects of our Kenyan society.

The ultimate goal of this transformation would be to replace the neocolonial status quo with a free, just, equitable and egalitarian, peaceful, prosperous, ecologically safe and democratic society. Such a society would form the basis on which to hold a national discussion of its weaknesses and, based on this dialogue, consequently build a firm foundation for yet another, better society, at which point it would come as no surprise if another new constitution were to be promulgated.

We the people of Kenya, having created the constitution, not only imposed it on the ruling elite but we then proceeded to hand over the baby to the same elite—a political leadership of child and body parts traffickers—to bring it up. A progressive constitution requires a progressive political leadership for its implementation.

The struggles of constitution-making do not end with its promulgation. Its implementation continues the struggles between the anti-constitution forces and those forces that call for its robust implementation and, as we approach the tenth anniversary of the promulgation of the 2010 Constitution on 27 August 2020, the struggle for its implementation continues unabated.

Genesis of the Struggle

The independence constitution gave birth to a neocolonial system that ensured the colonial state remained intact. Indeed, under that constitution, the multi-racial and multi-ethnic ruling elite continued to protect foreign interests, including the British colonial powers that never left Kenya. Therefore, it is not surprising that the independence constitution was resisted right from the time of its promulgation.

The opposition party, the Kenya People’s Union (KPU), opposed the neocolonial status quo. Both Jaramogi Oginga Odinga’s book, Not Yet Uhuru and Bildad Kaggia’s The Roots of Freedom chronicle this fact. Both authors were founding members of KPU. Underground political formations such as The December Twelfth Movement and Mwakenya, and their publications Mwunguzi, Cheche, Pambana and Mpatanishi, also resisted the neocolonial state and its policies.

The so-called Second Liberation movement was premised on the repeal of Section 2A of the constitution that decreed the supremacy of one-party dictatorship. The movement also sought to have a constitution that would be aligned to the promise of a multi-party democracy while civil society organisations and opposition political parties continued the struggle for a new constitution. When the Moi-KANU dictatorship was defeated in 2002, the Kibaki-KANU-NARC dictatorship could not resist the people’s clamour for a new constitution and the 2010 Constitution was promulgated on 27 August 2010.

Gains and Challenges

The vision of the 2010 Constitution makes clear the rejection of the neocolonial status quo and affirms the supremacy and sovereignty of the Kenyan people as those with the powers to recall their representatives in parliament. The constitution provides for gender equity and equality and reiterates that the three arms of government derive their authority from the people. It promotes a political leadership comprised of men and women of integrity and national institutions that are independent and whose authority is derived from the people of Kenya. The constitution eschews the politics of division and calls for institutionalised, de-personalised, and democratic political parties, signaling the end of 47 years of gross electoral injustices.

We have a progressive Bill of Rights running the whole gamut of political, civil, economic, social, and cultural rights: decentralisation and democratisation of the imperial presidency to devolution; holding institutions, particularly those in finance and security, accountable to the power of the constitution; equitable distribution of national resources; the protection of land, our major resource, through the reduction to 99 years of the duration of leases given to foreign interests and the creation of a new land law regime that is communitarian to co-exist with a tenure system under which land is commodified (the co-existence of the two land tenures systems is envisaged as a strategy to build a future system that is based on access and use of land to all).

The neocolonial status quo served strong, dangerous, greedy and corrupt foreign and national interests that saw the promulgation of the 2010 Constitution as an inconsequential hiatus. This position has been resisted, reflecting the continued struggles for its implementation which has seen both progress and retrogression. Firstly, the imperial presidency has not been fully democratised and decentralised. Its restructuring has been resisted. It continues to oversee opaque sovereign debts and corruption and, against the provisions of the constitution, continues to maintain the colonial and neocolonial machinery of violence. Both the Treasury and the security apparatus are still departments of the imperial presidency contrary to the decrees of the constitution. And nor has there been consistent support for devolution from the imperial presidency and some institutions have become less independent while others have become moribund. No strong checks and balances exist.

We have witnessed the return of intra-elite struggles christened with various monikers: Tanga Tanga, Kieleweke, Tinga Tinga, Manga Manga, BBI, Dynasties, Hustlers. These struggles portend possible violence during the elections in 2022. They are also a reflection of a ruling elite that has maintained the politics of division (ethnic, religious, gender, generational, regional, clan, class, occupation and race) and that is extremely callous in its politics of inhumanity. It is an elite that continues to act as the loyal comprador class of foreign interests in the West and East. The forces massed against the implementation of the constitution are headquartered in the bosoms of the Kenyan elite.

Devolution has engendered in Kenyans the belief that resources will be shared equitably, that Kenya will become peaceful and stable, and that projects of state-building and nation-building will be strengthened. Under devolution, baby steps have been taken towards ending the marginalisation of certain counties and communities. In some counties, the sharing of state power with the grassroots through public participation has taken place and in others the leadership has resisted corruption.

Although the jurisprudence on Chapter 6 of the Constitution (Leadership and Integrity) is yet to be settled in the Supreme Court, we have witnessed progressive jurisprudence on the protection of devolution as well as on the implementation of the Bill of Rights (in particular political, civil, housing, evictions and public interest litigation) and on the overall protection of the independence of the judiciary.

We have seen attempts by the imperial presidency and parliament to thwart this positive trend by starving the judiciary of funds. Court orders have been disobeyed, weakening the constitution and the rule of law. Both the imperial presidency and the neocolonial parliament still believe that national resources belong to them and that—as those who hold the taxpayers’ money in trust—they are not accountable to the people from whom both institutions derive their powers.

We have also witnessed robust protection of the constitution from civil society groups, both in the middle class and at the grassroots. We have seen the emergence of movements that are calling for alternative leaderships at the helm of the movements of transformation and political parties. We have also heard the clarion call that “We do not want reforms from the current political leadership; We want the political power to carry out authentic reforms. We are now the authentic people’s opposition”. The emancipatory spirits of Mau Mau, the independence movements, the movements against neocolonialism, Saba Saba and Limuru have been resurrected. In all these movements, the centrality of the Kenyan youth is visibly signaling new political demands from those who have been marginalised by the system.

Coronavirus: Breath of New Life into the Struggle?

Indeed, the pandemic has provided a great opportunity to continue the struggle for the implementation of the 2010 Constitution. I believe the pandemic has brought with it the answer to the ever-present political question in Kenya: Who are the friends and who are the enemies of the Kenyan people?

The pandemic has further exposed the inhumanity of the state and the elite political leadership by their actions during this crisis: extrajudicial killings; demolition of the housing of the poor in Kariobangi Sewerage and at Ruai; disobedience of court orders in regard to the pandemic; refusal to take steps to progressively bring about the realisation of the public good under Article 43 of the Constitution (food, water, education, social security, health, sanitation); and, with the exception of two, a lack of response through social justice philanthropy from the billionaires and multi-millionaires and their infamous foundations.

If any evidence were needed to show how uncaring our state and the ruling class are towards the majority of the population, it is in their demands that the poor wash their hands while failing to provide them with soap and water using the resources that they hold in trust for the people.

To oppress the poor for not wearing masks was callous in the extreme, while lockdowns and curfews became death sentences for those who had no food and those looking for casual jobs to survive. No resources were committed to implementing the right to health for all. Indeed, all we heard were the familiar tales of corruption as the pandemic provided the elite class with another opportunity to indulge their unquenchable thirst for theft and debts.

One positive effect of the pandemic has been to hasten the national discussion on the formation of alternative political movements and leaderships. Many virtual meetings and launches have been convened, events ironically made possible by the very tools developed by surveillance capitalism.

Alternative transformative movements are growing in strength. Embryonic alternative political parties exist, their mobilisation and organisation energised by the pandemic. The merger of these movements and political parties is no longer an abstract idea and, as they move in from the margins, the old normal of before the pandemic—which was neither acceptable nor sustainable—is no longer guaranteed a further lease of life.

Indeed, the pandemic has breathed some life into the struggles for the implementation of the constitution. Calls by the elite to change the constitution have been met with demands to tekeleza katiba, implement the constitution. The good news to me seems to be that this herculean struggle will result in the baronial narrative that has gone unchallenged for the last 57 years facing the resistance of strong counter-narratives. Ironically, it is these counter-narratives, these alternative movements and political leaderships that will protect the baronial elites from themselves and their politics of revenge, and guarantee the national peace that the elite have shown themselves to be incapable of providing.

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Seeds of Neo-Colonialism: Why GMO’s Create African Dependency on Global Markets

Rather than addressing food scarcity, genetically modified crops may render African farmers and scientists more, not less, reliant on global markets.

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Seeds of Neo-Colonialism: Why GMO’s Create African Dependency on Global Markets
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As COVID-19 continues to lay bare the deficiencies in the global food system, imagining new food futures is more urgent than ever. Recently, some have suggested that seeds that are genetically modified to include pest, drought, and herbicide resistance (GMOs) provide an avenue for African countries to become more self-sufficient in food production and less reliant on global food chains. Although we share the desire to build more just food systems, if history is any indicator, genetically-modified (GM) crops may actually render African farmers and scientists more, not less, reliant on global actors and markets.

In a paper we recently published in African Affairs, we trace a nearly 30-year history of collaborations among the agribusiness industry, US government agencies, philanthropic organizations, and African research councils to develop GMOs for African farmers. We found that these alliances, though impressive in scope, have so far resulted in few GMOs reaching African farmers and markets. Why, we ask, have efforts to bring GMOs to Africa yielded so little?

One reason, of course, is organized activism. Widespread distrust of the technology and its developers has animated local and transnational social movements that have raised important questions about the ownership, control, and safety of GM crops. But another issue has to do with the complex character of the public-private partnerships (PPPs) that donors have created to develop GM crops for the continent. Since 1991, beginning with an early partnership between the US Agency for International Development (USAID), the Kenyan Agricultural Research Institute, and Monsanto to develop a virus resistant sweet potato (which never materialized), PPPs have become a hallmark of GMO efforts in Africa. This is mainly so for two reasons. The first is that GM technology is largely owned and patented by a handful of multinational corporations, and, thus, is inaccessible to African scientists and small to mid-sized African seed companies without a partnership agreement. The second is that both donors and agricultural biotechnology companies believe that partnering with African scientists will help quell public distrust of their involvement and instead create a public image of goodwill and collaboration. However, we found that this multiplicity of partners has created significant roadblocks to integrating GMOs into farming on the continent.

Take the case of Ghana. In the mid-2000s, country officials embarked on an impressive mission to become a regional leader in biotechnology. While Burkina Faso had been growing genetically modified cotton for years, Ghana sought to be the first West African country to produce GM food crops. In 2013, Ghanaian regulators thus approved field trials of six GM crops, including sweet potato, rice, cowpea, and cotton, to take place within the country’s scientific institutes.

However, what began as an exciting undertaking quickly ran into the trouble. Funding for the sweet potato project was exhausted soon after it began. Meanwhile, cotton research was put on indefinite hold in 2016 after Monsanto, which had been supplying both funding and the Bt cotton seed, withdrew from its partnership with the Ghanaian state scientific council. Describing its decision, a Monsanto official said that without an intellectual property rights law in place—a law that has been debated in Ghanaian parliament and opposed by Ghanaian activists since 2013—the firm could not see the “light at the end of the tunnel.”

Monsanto was also embroiled in legal matters in Burkina Faso, where their Bt cotton had unexpectedly begun producing inferior lint quality. Meanwhile, Ghanaian researchers working on two varieties of GM rice had their funding reduced by USAID, the main project donor. This left them with insufficient resources, forcing the team to suspend one of the projects. The deferment of both the cotton and one of the rice projects dealt a blow to the Ghanaian scientists who were just a year or two away from finalizing their research.

In many ways, the difficulties presented here from both Ghana and Burkina Faso suggest that efforts to bring agricultural biotechnology to Africa are a house of cards: the partnerships that seem sturdy and impressive from the outside, including collaborations between some of the world’s largest philanthropies and industry actors, are actually highly unstable. But what about the situation in other countries?

Both Nigeria and Kenya have made headlines recently for their approval of GM crops. The news out of Nigeria is especially impressive, where officials recently approved a flurry of GMO applications, including Bt cotton and Bt cowpea, beating Ghana to permit the first genetically modified food crop in West Africa. Kenya also approved the commercial production of Bt cotton, an impressive feat considering the country has technically banned GMOs since 2011. Both countries, which have turned to an India-based Monsanto subsidiary for their GM seed supply, hope that Bt cotton will help revitalize their struggling cotton sectors. While biotech proponents have applauded Nigeria and Kenya for their efforts, it will take several growing seasons and more empirical research to know how these technologies will perform.

As the cases described here demonstrate, moving GMOs from pipeline to field is not simply a matter of goodwill or scientific discovery; rather, it depends on a multitude of factors, including donor support, industry partnerships, research outcomes, policy change, and societal acceptance. This complex choreography, we argue, is embedded in the DNA of most biotechnology projects in Africa, and is often ignored by proponents of the technology who tend to offer linear narratives about biotech’s potential to bolster yields and protection against pests and disease. As such, we suggest the need to exercise caution; not because we wish to see the technology fail, but rather because we are apprehensive about multi-million dollar collaborations that seemingly favor the concerns of donors and industry over those of African scientists and farmers.

The notion of public-private partnerships may sound good, but they cannot dispel the underlying interests of participating parties or the history and collective memory of previous efforts to “improve” African agriculture.

This post is from a new 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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