A worried friend called me about a situation he has observed in his neighbourhood somewhere in Kileleshwa. The part-time house-helps who work in the neighbourhood are now jobless. Their clients are at home and can do their own domestic chores, and also limit contact with outsiders in keeping with social distancing. The desperate ladies are now congregating at the roadside perhaps hoping to catch the eye of a passing client to lend a helping hand.
At the onset of the COVID-19 crisis, some influential voices in the West, Bill Gates and the UN Secretary General Guterres notably, expressed concerns for Africa and called on the world to prepare to stave of the unimaginable tragedy should the pandemic spread to these shores. Bill Gates talked of 10 million deaths. It may be early days yet, but it has so far not panned out that way, touch wood.
The 2019 Global Health Security Index lists the United States and the United Kingdom as the countries most prepared to handle a pandemic in the world. As I write, the two Anglo-Saxon transatlantic allies account for 35 per cent of confirmed cases, and 40 per cent of fatalities. The UK and Ireland are as similar as any two countries, yet the UK has 11,000 deaths, Ireland 340. Post-COVID-19, the UK and the US will probably end up at the bottom of the heap. The index, now destined for disrepute, is compiled by the Nuclear Threat Initiative and the Johns Hopkins Center for Health Security in collaboration with the Economist Intelligence Unit (EIU), all of them US/UK institutions—imperial hubris and navel gazing.
I fear that many well-to-do Kenyans—those I occasionally chide as #UpperDeckPeopleKE— have a similar blindspot, namely, projecting the crisis onto those less privileged than themselves, wanting to believe that as long as they are properly social-distancing and working remotely, they are insulated from the crisis, and the charitably predisposed can do what they are able to do to extend a helping hand to the less priveleged who (like Africa) are the most exposed. Indeed, when I proposed a Lifeline Fund to cushion businesses and jobs in my open letter to the president three weeks ago, one of the most common reactions was, how would it help mama mboga (the vegetable woman, i.e. vendor)? It was lost to these people that mama mboga would continue to be in business, and might in fact benefit from the switch from eating out to eating at home. Not a single person who engaged me on this issue came across as worried for themselves.
In this column, I will endeavour to put some numbers to the COVID-19 economic shock. I will start with the structure of expenditure in the economy, which we also refer to in economics as aggregate demand. It consists of private consumption, private investment, government consumption, government investment and exports. Everything produced in or imported into Kenya ends up in one of these aggregates. Private consumption is two-thirds of final demand, private investment and exports combined account for just under a quarter, and government spending for just over 10 per cent (see chart below).
What is COVID-19’s impact on each of these?
Private consumption: Food accounts for a third of private consumption, so that will survive, although not the restaurant business. In the US, restaurants account for 60 per cent of the jobs lost so far. Over and above food, most people are only spending money on essential household items. The leisure economy—tourism and sports notably—is out for the count. Best-case scenario: a 60 per cent contraction.
Private investment: Of the five components, investment is the most sensitive to uncertainty. Some businesses will complete projects that are underway, if they are able, but new capital projects will be put on hold. Best-case scenario 75 per cent contraction.
Exports: Horticulture is Kenya’s second-largest export industry after tea, earning $1.2 billion (Sh120 billion), accounting for 20 per cent of exports of goods. The industry has been severely disrupted. The East African Community and COMESA (Common Market for Eastern and Southern Africa) countries, which account for a third of exports, are as disrupted as we are. Just as we are not consuming or investing much, they also will not be buying much. Every other export industry is disrupted to some extent. We also need to factor in diaspora remittances, which are not directly captured in the national income accounts. Diaspora remittances are estimated at US$2 billion a year, which translates to 2.5-3.0 per cent of private consumption. Best-case scenario: 50 per cent contraction.
Government consumption: This aggregate consists primarily of recurrent operations and maintenance (O&M) expenditure, i.e. the goods and services that the government uses to provide services. In principle, the COVID-19 shock may not affect it too much because the government can move money from low to high-priority spending, for example from travel to health. Best-case scenario: no disruption.
Government investment: The government could in principle continue with its development projects, although they will be slowed down by the physical disruption, and the logistical challenges created by the partial lockdown of Nairobi. Best-case scenario 25 per cent disruption.
These disruptions add up to 35 per cent expenditure contraction, which I estimate to translate to Sh390 billion a month. The next question is, for how long? Again, the best-case scenario for the pandemic appears to be another two to three months before the global curve flattens sufficiently for countries to risk letting their guard down a little. But the best-case scenario for a vaccine to become available is six months to a year.
A four-month disruption scenario, i.e. to July, works out to a contraction of Sh1.56 trillion. But, of course, the economy will not bounce back immediately, so if we factor in a 50 per cent recovery to December, it goes up to Sh2.3 trillion, which is in the order of 20 per cent of nominal GDP (i.e. before inflation adjustment). Roughly, a one percentage point in nominal GDP translates to 0.4 per cent real (i.e. inflation adjusted) growth, the figure that is normally reported as the annual economic growth rate of between 4 and 6 per cent in recent years. A 20 per cent nominal GDP contraction thus translates to an eight percentage points drop in real GDP growth, which takes us into negative three per cent territory. We have no precedent of an economic shock of this magnitude to compare with.
This is the situation unfolding the world over. Sixteen million people, 10 per cent of the US workforce, have lost their jobs in less than a month. The Penn Wharton Budget Model, a Wharton Business School fiscal policy analysis project, estimates that even with the mammoth $2.2 trillion stimulus, the economy will still shrink by 30 per cent in the second quarter. If borne out, it will be the largest quarterly contraction since World War II. With no end in sight, the language has changed from recession to depression.
Last week the Canadian government recalled parliament and passed a C$73 billion emergency wage subsidy bill, to augment the $103 billion emergency relief package passed a few weeks ago. The first relief package was equivalent to 4.4 per cent of GDP. This increase takes it up to 7.5 per cent. Such was the sense of urgency that the bill was processed by both houses on a Saturday afternoon, and signed into law at 9.30 p.m. that same night.
I am still hopeful that we will dodge the pandemic bullet, or that if it does hit, it will not be cataclysmic. But the economic consequences are inescapable. As this column has observed, the epidemiological and economic dynamics of the pandemic have decoupled. The economy is being ravaged by our self-preservation instinct. The economy thrives on venturesome behaviour—the willingness to trade risk for reward. But seldom is this trade-off a life and death issue—although to be sure some people, gangsters for example, do take life and death risks to make a buck. For the overwhelming majority, making a living is not life threatening. The coronavirus is making it so. We do not know how long it will be before venturing into nightclubs, huge weddings, spectator sports and international travel becomes routine again.
I am still hopeful that we will dodge the pandemic bullet, or that if it does hit, it will not be cataclysmic
A contraction of this scale will shed a lot of jobs. Cities and towns, Nairobi in particular, will be the most badly hit. In another month, a quarter of the Nairobi metropolitan area population—about 1.5 million people—may not have a penny to their name. Even a daily survival budget of Sh50 works out to Sh75 million a day. It is doubtful that private charity can sustain this for a week, and we are talking months.
In a prolonged crisis, formal establishment workers are more exposed to job losses and financial insecurity than those in the micro and small enterprise informal sector, and the higher up the managerial ladder, the more the exposure. Why so? In the micro and small enterprise economy (MSMEs), jua kali as we call it, many enterprises engage own-account workers, for instance, hairdressers, mechanics and carpenters who work for themselves and pay a portion to the business owners. When business is down, people work fewer hours and earn less, but no-one is laid off since they are not on a payroll in the first place. We would characterise jua kali as a flexible wage economy, while the corporate sector as a rigid wage economy.
In economics, wage rigidity/flexibility is a very big deal. If wages were as flexible as the prices of goods, earnings would rise in boom time and decline during downturns. The problem with a contract wage economy is that workers get pay rises when the economy is doing well, but are wont to take pay cuts during downturns (we say that wages are “sticky downwards”) so the only way businesses can reduce costs when business is low is to lay off some workers. The jua kali economy is better cushioned because they share the work available and get a lower income instead of some earning a lot and others nothing. Moreover, given these flexible arrangements and volatile incomes, many of these workers are diversified, that is, they seldom depend on one income stream. As counter-intuitive as it may sound, the “job insecure” jua kali workers are more economically secure.
In another month, a quarter of the Nairobi metropolitan area population— about 1.5 million people—may not have a penny to their name
There is also the supply side. The market economy is an integrated and complex autonomous system whose workings we take for granted. The entire edifice is built on, and operated by only two impulses: self-interest and price signals—the impulses that Adam Smith famously named the invisible hand. The invisible hand is the trader who aggregates livestock, takes it to market, returning home with groceries and other supplies for his customers deep in Maasailand. The markets are now closed. It is the much-maligned middleman in that sukuma wiki-laden jalopy that appears out of nowhere in foggy Kinungi. It is tough enough turning a profit in normal times, let alone when one is being shaken down and beaten by police at every turn.
To paraphrase Smith, it is not from the benevolence of the farmer or the trader that we expect our dinner, but from their regard to their own self-interest. Once they can’t turn a profit, the dinner will simply not appear, without notice. Only then will we know that social-distanced online work cannot actually feed us, food delivery apps notwithstanding. A critical piece of equipment for medical supplies has broken down, but the maintenance company has shut shop, the fundis have dispersed upcountry, and spare parts are stuck in Dubai. It will take a week at least to get the operation up. Day by day, the coronavirus ravages the economy just as it is ravaging people.
Canadian economist Armine Yalnizyan calls the COVID-19 shock “a completely different economics”. “We’re into something else entirely, and the sooner Canada’s decision-makers and news-shapers recognize the contours of this new landscape the sooner we will be able to make sense of the world on the other side”.
The jua kali economy is better cushioned because they share the work available and get a lower income instead of some earning a lot
The sooner decision makers recognize the contours of this new landscape . . . She couldn’t have put it better. Earlier this week the Africa Union appointed some eminent person to mobilise resources. As I write, Africa has lost 790 people, 0.7 per cent of the fatalities. Europe and North America have lost over 100,000, and the toll is still rising. It is not just their economies that are devastated, societies are traumatised. We are going to beg from shell-shocked people who are hanging in by the skin of their teeth; just how helpless, insensitive and entitled can we be?
The most dismal prognosis of “the other side” that I have come across has been put forward by financial economics professor John H. Cochrane, who characterises the coronavirus as a negative permanent technology shock. Technology shocks in economics are transformational innovations—such as steamships, the internal combustion engine, aviation, the microchip—which have propelled modernity since the industrial revolution. Technology shocks have long impulses, for example, from the telegraph to the internet, and from the Wright Brothers to ubiquitous international aviation—and a jet-borne pandemic. A permanent negative technology shock, therefore, is a euphemism for a long-term productivity slowdown, a great leap backwards if you like.
My own sense is that the coronavirus will accelerate a “post-industrial world” that will indeed have elements of going back to basics. How might this “other side” look like?
As the economy convulses, many of the lower income urban workers—who are at any rate temporary migrants—will go back home, as they do during economic downturns and political upheavals. Many will not come back. Over time, self-reliance and resilience will replace preoccupation with getting ahead in the rat race. Development “silver bullets” such as rapid industrialisation, megastructures and growth über alles will lose their allure. Health and nature will matter more. People will be content with life on the slow lane. In this back-to-the-future world, it is the farmers, the fundis and the social workers—teachers, healers, artists—who will be in their element, and the managerial layers of paper pushers—bureaucrats and brokers—who will struggle to find footing and purpose.
Only then will we know that social-distanced online work cannot actually feed us, food delivery apps notwithstanding
The state-society relationship will also be up for critical examination. So far, the national government’s heavy-handed law-and-order approach to a health crisis—its colonial DNA—has ensured that it has not wasted a single opportunity that it has been afforded by the coronavirus to aggravate and further alienate citizens. The only people-centred state responses we’ve seen are from the county governments that the Jubilee administration has been doing its best to undermine and turn the people against. The national political class, parliament notably, has jumped ship and abandoned the people— vanished. But the Jubilee bigwigs have found time for skulduggery over their moribund political party, while Raila Odinga found it wise to give reassurance that the coronavirus is a minor storm and the reggae tsunami will be resuming in no time at all. A more tawdry and inopportune display of mindless obsession with power is hard to contemplate.
With every passing day, the prescience of Singaporean Foreign Minister Vivian Balakrishnan’s assertion that the coronavirus will test and mercilessly expose the shortcomings of every country’s health system, governance standards and social capital, is affirmed.
Which entrails of our dysfunctional governance, our venal political class, and the patronage oligarchy writ large—the hollow men—the coronavirus will bare is sure to become clear in the coming days. As to the nature of the beast that will come out on the other side, only time will tell.
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Kenneth Kaunda: The Founding President of Zambia
Independence leader who fought white rule and helped shape postcolonial southern Africa
This piece was originally published in the Financial Times and is republished in the Elephant with the express permission of the author.
Kenneth Kaunda, Zambia’s founding president who has died aged 97, was a towering figure of African nationalism and the anti-colonial independence movement that swept the continent in the 20th century. For his 25 years in office he fought apartheid, yet was more a victim of southern Africa’s white minority regimes than an instrument of their collapse.
After taking office at independence in 1964, Kaunda banned all political parties except his United National Independence party in 1972. In 1991 he reluctantly conceded multi-party elections, in which he was soundly defeated. Nonetheless, Kaunda ruled Zambia with a rare benevolence in an era of dictatorships and systematic abuse of human rights. His Christian faith, together with socialist values, was at the heart of his doctrine of “Zambian humanism”.
At home, his policies were little short of disastrous economically. Zambia’s all-important copper mines were nationalised shortly before a fall in the commodity’s price, while industries were taken over by an administration short of managers — the country had only a dozen university graduates at independence in 1964 — and newly created state-owned farms proved a failure.
Abroad, his influence never quite matched his rhetoric. He denounced white rule but was inhibited by landlocked Zambia’s dependence on trade through neighbouring Rhodesia and apartheid South Africa. Closure of the border with Rhodesia left his country dependent on a road to the Tanzanian port of Dar es Salaam for its fuel imports. A Chinese-built rail link opened in 1975, but the line never met its potential.
Born at Lubwa Mission on April 28 1924 in what was then Northern Rhodesia, Kenneth David Kaunda was the eighth child of teacher parents. After secondary school he too became a teacher, but in 1949 he gave up teaching to enter politics. By 1953 he was secretary-general of the country’s African National Congress party. Impatient and ambitious, he formed his own party in 1958, which was banned a year later.
In 1960 he took over the leadership of the United National Independence party. It swept to victory in the independence election of 1964, ending Zambia’s legal status as a British protectorate. Almost immediately, Kaunda was confronted by the white Rhodesian rebels’ unilateral declaration of independence on November 11 1965.
For the next 15 years his political life was dominated by the Rhodesian bush war, which spilled over into Zambia. He provided a base not only for Joshua Nkomo’s Zimbabwe African People’s Union but South Africa’s own African National Congress, Namibia’s South West Africa People’s Organisation, the FNLA of Angola and Frelimo from Mozambique.
His frequent tearful warnings of regional cataclysm, invariably delivered while holding a freshly ironed white handkerchief, were heartfelt but ineffectual.
Historical and geographical realities left him with a weak hand.
His decision to keep the border with Rhodesia closed hurt Zambia far more than it did his neighbour, and its eventual reopening in 1973 was a humiliating climbdown. A meeting with John Vorster, prime minister of apartheid South Africa in 1975, achieved little, while his secret talks with Ian Smith, Rhodesia’s white minority leader, served only to sour relations with Nkomo’s rival, Robert Mugabe, who was to win the elections for an independent Zimbabwe in 1980.
Pro-independence events had also left Kaunda at a serious disadvantage. The huge Kariba hydroelectric dam was built on the Zambezi river that formed the boundary with Rhodesia. Its generator was on the south bank, leaving the latter in control of power supplies to Zambia’s copper mines.
Perhaps his finest hour came when he hosted the 1979 Commonwealth conference that helped pave the way to Rhodesia’s transition to an independent Zimbabwe. The highlight was a beaming Kaunda leading Margaret Thatcher around the dance floor.
Trade union-led pressure for an end to the country’s one-party system eventually became irresistible, and in 1991 he conceded to demands for the multi-party poll that led to his ousting.
One of his last public appearances was at the funeral of Nelson Mandela, where he attempted to get the crowd of mourners to join him in a rendition of “Tiyende Pamodzi” (let us pull together), a rousing Unip anthem sung at Unip rallies.
The response was an uncomprehending silence. Kaunda had become disconnected from the Africa that he, Mandela and others had worked to shape.
This piece was originally published in the Financial Times and is republished in the Elephant with the express permission of the author.
Cherry-Picking of Judges Is a Great Affront to Judicial Independence
Uhuru Kenyatta’s refusal to fulfil his constitutional duty to appoint and gazette JSC-nominated judges is a tyranny against the judiciary.
The 2010 constitution placed an onerous responsibility on the judiciary. That responsibility is to check that the exercise of public power is done in a manner that is compliant with the constitution. The constitution brought everyone, including the president – in both his capacities as the head of state and head of national executive – under the law. Hence, the judiciary has the final word when called upon to determine whether anything done or said to be done by anyone in the exercise of public power is constitutional.
To ensure that judges and magistrates can perform this task, the 2010 constitution created a strong architecture to secure judicial independence. In a nutshell, judicial independence simply means creating the necessary guardrails to ensure that judges and magistrates are and feel fully protected to make the right decision without fear of reprisal and that the judiciary has the facilities it needs to create an enabling environment to facilitate judges and magistrates’ abilities to undertake that core mandate. Ordinarily, the critical aspects of judicial independence include decisional, operational/administrative as well as financial independence.
Operational independence safeguards the ability of the judiciary to run its affairs without interference from other arms of government or from anyone else. Financial independence on the other hand ensures that the judiciary is well funded and fully in control of its funds so that its core duty (decision-making) is not frustrated by either lack of funds or the possibility of a carrot–and-stick approach where the executive dangles funding to extract the decisions it wants. In this regard, the constitution creates a judiciary fund and places it under the administration of the judiciary. Unfortunately, the national government and the treasury have continued to frustrate the full operationalisation of the judiciary fund.
Centrality of an individual judge’s independence
Importantly, the foundational rationale for judicial independence and its different facets is securing the decision maker’s (judge and magistrate) individual independence. This is commonly referred to as decisional independence. In the end, the judiciary exists for only one reason: to adjudicate disputes. In this regard, the person who is charged with decision making is the one who is the primary beneficiary of judicial independence. Of course, ultimately, everyone benefits from an independent judiciary.
Still, the constitution has specific and high expectation of the decision-maker, including that he or she makes decisions based only on an objective analysis of the law and the facts. The decision maker must not be mesmerised or cowed by power. He or she should never be beholden to power – in the present or the future. Simply put, under the constitution, a decision maker should never have to think about personal consequences that he or she may suffer for making a decision one way or another as long as that decision is based on an honest analysis of the law and the facts. Put a bit differently, the decision maker should never have to make (or even think of calibrating) his or her decision to please those in or with power – either within the judiciary or outside it – with the expectation that it will help him or her to obtain professional favours, promotion or to avoid reprisals.
And this is why Uhuru Kenyatta’s cherry-picking of who should or should not be appointed judge is the greatest threat to judicial independence in Kenya.
But first a quick word on what the constitution says about the process of selecting, appointing and disciplining judges.
Selection and disciplining of judges
Before 2010, the president played a controlling role in the selection of judges. This meant that the surest way to become and remain a judge was by being in the good books of the president and his handlers. The result was that the judiciary was largely an appendage of the executive – and could hardly restrain the abuse of public power by the president or other ruling elites. The 2010 constitutional provisions on the judiciary were deliberately designed to eliminate or highly diminish this vice.
The power to select judges was given to the Judicial Service Commission (JSC), a body representative of many interest groups, the president key among them. Constitutionally, the president directly appoints three of the 11 JSC members: the attorney general and two members representing the public. But with his usual ingenuity at subverting the constitution, Uhuru Kenyatta has added to this list a fourth – by telling the Public Service Commission (PSC) who should be its appointee. Regardless, while there are always endless wars to control the JSC especially by the executive, the many interests represented complicate a full takeover of the JSC by the executive or any other interests. And that is partly what the constitution intended to achieve. The law – which the court has clarified numerous times – is that once the JSC has nominated persons to be judges, the president’s role is purely ceremonial, and one that he performs in his capacity as head of state. He must formally appoint and gazette the appointment of the judges. No ifs, no buts.
This is why Uhuru Kenyatta’s cherry-picking of who should or should not be appointed judge is the greatest threat to judicial independence in Kenya.
In fact, the law further clarifies that not even the JSC can reconsider its recommendation once it has selected its nominees. There is a good reason for this unbendable procedure – it helps to insulate the process from manipulation especially once the JSC has publicly disclosed its judge-nominees. Still, the constitution preserves for the president, the JSC and citizens the option of pursuing a rogue nominee by providing the realistic possibility for the initiation of a disciplinary and removal process of a judge even after appointment if there are legitimate grounds for such action.
In this regard, the JSC also has the responsibility to discipline judges by considering every complaint made against a judge to determine whether there are grounds to start proceedings for removal. It is to be noted that the president has more substantive powers in relation to the removal of judges. This is because if the JSC determines that there are grounds for the removal of a judge, the president’s hand is mostly unrestrained with regards to whom he appoints to sit on the tribunal to consider whether a judge should be removed. Unfortunately, there is an emerging trend that indicates that Uhuru undertakes this task in a biased manner by subjectively selecting tribunal members who will “save” the judges he likes.
The injustice of cherry-picking
Now, back to the injustices of Uhuru’s cherry-picking of judges for appointment.
The injustice is horrific for both the appointed judges and those who are not appointed, especially those of the Court of Appeal. Under the 2010 constitution, you do not become a superior court judge by chance.. For High Court judges nominated to the Court of Appeal, this is earned through hard work, countless sleepless nights spent writing ground-breaking judgments and backbreaking days sitting in court (likely on poor quality furniture) graciously listening to litigants complain about their disputes all day, and then doing administrative work to help the judiciary keep going. All this while maintaining personal conduct that keeps one away from trouble – mostly of the moral kind. Magistrates or other judicial staff who move up the ranks to be nominated judges endure the same.
The injustice is horrific for both the appointed judges and those who are not appointed, especially those of the Court of Appeal
If ever there was a list of thankless jobs, those of judges and magistrate would rank high on the list. It is therefore completely unacceptable that a faceless presidential advisor – probably sitting in a poorly lit room with depressing décor and a constantly failing wifi connection, and who likely has never met a judge – can just tell the president, “Let’s add so and so to the list of judges without ’integrity’. And by the way, from the last list, let’s remove judge A and add judge Z”. Utterly unfeeling and reckless. Worse, the judge is left to explain to the world what his/her integrity issues are when he or she knows nothing about them.
Cherry-picking also creates a fundamental perception problem. Kenya’s Supreme Court has confirmed that perception independence is a critical element of independence. For litigants appearing before the judges who were appointed in cases involving the president or the executive, it will be hard to shake-off the stubborn but obviously unfair thought that the judge earned the appointment in order to be the executive’s gatekeeper. That is what minds do; they conjure up possibilities of endless, and at times, conspiracy-inspired thoughts. Similarly, those who appear before a judge who was left out will likely believe that the judge – who decides a case impartially but against the executive – is driven by the animus of non-appointment. And you can trust the president’s people to publicly say as much and even create a hashtag for it. Yet such perceptions (of a judge who is thought to favour or be anti-executive) are relevant because justice is both about substance and perception.
And that is the psychological tyranny of Uhuru’s unconstitutional action – for both the judges that have been appointed and to those who have not. It is, indeed, a tyranny against the judiciary and, in a smaller way, against all of us. Perhaps just as Uhuru intended it to be.
COVID-19 Vaccine Safety and Compensation: The Case of Sputnik V
All vaccines come with medical risks and Kenyans are taking these risks for their protection and that of the wider community. They deserve compensation should they suffer for doing so.
How effective is Kenya’s system for regulating new medicines and compensating citizens who suffer side-effects from taking them? Since March 2021, Kenya has been using the AstraZeneca vaccine supplied through COVAX to inoculate its frontline workers and the older population. This is available to the public free of charge, according to a priority list drafted by the Ministry of Health (MOH). The Pharmacy and Poisons Board (PPB) also approved the importation of the Sputnik V vaccine from Russia, which was initially available through private health facilities only at a cost of KSh8,000 per jab, before the MOH banned it altogether. However, there were reports in the media that the vaccine continued to be administered secretary even after the ban.
Although side effects are rare, we know that all vaccines come with certain medical risks. Kenyans taking vaccines run these risks not just for their own protection, but also for that of the wider community. The state has a responsibility to protect citizens by carefully controlling the distribution of vaccines and by ensuring that adequate and accessible compensation is available where risks materialise. These duties are enshrined in the constitution which guarantees the right to health (Article 43) and the rights of consumers (Article 46).
A system of quality control before the deployment and use of medicines is set out in the Pharmacy and Poisons Act the Standards Act, the Food, Drugs and Chemical Substances Act and the Consumer Protection Act. However, the controversy over Sputnik V in Kenya has cast doubt on the coherence and effectiveness of this patchwork system. Moreover, none of these Acts provides for comprehensive compensation after deployment and use of vaccines.
Vaccine approval and quality control
Subject to medical trials and in line with its mandate to protect global health, WHO has recommended specific COVID-19 vaccines to states. Generally, WHO recommendations are used as a form of quality control by domestic regulators who view them as a guarantee of safety and effectiveness. However, some countries rely exclusively on their domestic regulators, ignoring WHO recommendations. For instance, the UK approved and administered the Pfizer vaccine before it had received WHO approval.
The COVAX allocation system fails to take into account the fact that access to vaccines within countries depends on cost and income.
By contrast, many African states have relied wholly on the WHO Global Advisory Committee on Vaccine Safety given their weak national drug regulators and the limited capacity of the Africa Centre for Disease Control (CDC). The Africa CDC itself deems vaccines safe for use by member states on the basis of WHO recommendations. Kenya has a three-tier approval system: PPB, Kenya Bureau of Standards and WHO. The PPB relies on the guidelines for emergency and compassionate use authorisation of health products and technologies. The guidelines are modelled on the WHO guidelines on regulatory preparedness for provision of marketing authorization of human pandemic Influenza vaccines in non-vaccine producing countries. However, prior to approval by PPB, pharmaceuticals must also comply with Kenya Bureau of Standards’ Pre-Export Verification of Conformity standards .
Vaccine indemnities and compensation
To minimise liability and incentivise research and development, companies require states to indemnify them for harm caused by vaccines as a condition of supply. In other words, it is the government, and not manufacturers, who must compensate them or their families where required. Failure to put such schemes in place has undermined COVID-19 vaccine procurement negotiations in some countries such as Argentina. Indemnities can be either “no-fault” or “fault”-based’.
No-fault compensation means that victims are not required to prove negligence in the manufacture or distribution of vaccines. This saves on the often huge legal costs associated with tort litigation. Such schemes have had a contested history and are more likely to be available in the Global North. By contrast citizens of countries in the Global South must rely on the general law, covering areas such as product liability, contract liability and consumer protection. These are usually fault-based, and require claimants to show that the vaccine maker or distributor fell below widely accepted best practice. Acquiring the evidence to prove this and finding experts in the sector willing to testify against the manufacturer can be very difficult.
By default, Kenya operates a fault-based system, with some exceptions. Admittedly, citizens have sometimes been successful in their claims, as in 2017 when the Busia County Government was ordered by the High Court to compensate victims of malaria vaccines. The High Court held that county medics were guilty of professional negligence, first by not assessing the children before administering the vaccines, and second by allowing unqualified medics to carry out the vaccination.
The problem is that the manufacturer has not published sufficient trial data on the vaccine’s efficacy.
In recognition of these difficulties, and in order to ensure rapid vaccine development during a global pandemic, WHO and COVAX have committed to a one-year no-fault indemnity for AstraZeneca vaccines distributed in Kenya. This will allow victims to be compensated without litigation up to a maximum of US $40,000 (approx. KSh4 million). To secure compensation, the claimant has to fill an application form and submit it to the scheme’s administrator together with the relevant evidentiary documentation. According to COVAX, the scheme will end once the allocated resources have been exhausted. The scheme also runs toll-free telephone lines to provide assistance to applicants, although the ministries of health in the eligible countries are also mandated to help claimants file applications.
Beneficiaries of the no-fault COVAX compensation scheme are barred from pursuing compensation claims in court. However, it is anticipated that some victims of the COVAX vaccines may be unwilling to pursue the COVAX scheme. At the same time, since the KSh4 million award under COVAX is lower than some reliefs awarded by courts in Kenya, some claimants may avoid the restrictive COVAX compensation scheme and opt to go to court. Because such claimants may instead sue the manufacturer, COVAX requires countries to indemnify manufacturers against such lawsuits before receiving its vaccines.
Sputnik V is different. Neither the WHO-based regulatory controls before use, nor the COVAX vaccine compensation scheme after use applies. Sputnik has not been approved by WHO or the Africa CDC. The PPB approved its importation in spite of the negative recommendation of Africa CDC, and in the face of opposition from the Kenya Medical Association. The rejection of Sputnik in countries like Kenya is partly due to the reluctance of Russia’s Gamaleya Institute to apply for WHO approval, partly because the manufacturer has not published sufficient trial data on the vaccine’s efficacy, and partly due to broader mistrust of the intentions of the Russian state. This may be changing as Africa CDC Regulatory Taskforce and European Medicines Agency are now reviewing the vaccine for approval while 50 countries across the globe have either approved its use- or are using it already. In Africa, Ghana Djibouti, Congo and Angola have approved the use of Sputnik V with Russia promising to donate 300 million doses to the African Union. Such approvals have been hailed for providing an alternative supply chain and reducing overreliance on the West.
As regards compensation, Russia has indicated that it will provide a partial indemnity for all doses supplied. However, no clear framework has been set out on how this system will work. There has therefore been no further detail on the size of awards, and whether they will be no-fault or fault-based. This lack of legal specifics has added to the reluctance of countries around the world to adopt the vaccine.
As matters stand, therefore, the Kenyan government would not be able to indemnify private clinics importing and administering Sputnik V. The absence of a statutory framework on vaccine compensation by the state makes this possibility even less likely. Nor would compensation be available from the Gamaleya Institute. The only route then would be through affected citizens taking cases based on consumer protection legislation and tort law in the Kenyan courts. As we have noted, this is complex and costly. Claims might be possible in Russia, but these problems would be exacerbated by language barriers and differences between the legal systems, as well as the ambiguity of the Russian compensation promises.
The private sector can complement state vaccination efforts, but this must be done in a way that guarantees accessibility and safety of citizens.
Although the importers obtained a KSh200 million insurance deal with AAR as a precondition for PPB authorisation, the amount per claimant was restricted to KSh1 million, which is well below the WHO rates and the average tort rates ordered by Kenyan courts. As an alternative to claiming against the manufacturers and distributors, injured patients might sue the Kenyan government. Such a claim would allege state negligence and dereliction of statutory and constitutional duties for allowing the use of a vaccine that has not been approved by global regulators such as WHO, thus exposing its citizens to foreseeable risks. This would be particularly attractive to litigants given the difficulties in recovering from the Russian authorities and the risk that Kenyan commercial importers would not be able to meet all possible compensation claims. Ironically, the use of the Sputnik V vaccine in private facilities still exposes the government to lawsuits even if it didn’t facilitate the vaccine’s importation and distribution.
What the government needs to do
The acquisition of vaccines has been undermined by the self-interested “nationalism” of states in the Global North. Only after buying up the greater part of available vaccines have they been willing to offer donations to the rest of the world. These highly publicised commitments fall far short of what is required in the Global South. Kenya’s first task must be to intensify its diplomatic efforts to increase supply through bilateral engagement with vaccine manufacturing states and in multilateral fora like the World Trade Organization, acting in alliance with other African states. Such steps are only likely to bear fruit in the medium term, however. In the short term, it is certainly sensible to involve private companies in vaccine procurement and distribution in order to supplement the supplies available through COVAX. This is recognised in Kenyan and international law as an acceptable strategy for securing the right to health. But it must be done in a way that guarantees accessibility and the safety of citizens. Accordingly, Kenya should encourage Russia (and all vaccine manufacturers) to publish full trial data showing effectiveness and risks, and to seek WHO approval on this basis. It should require them to establish and publicise detailed indemnity frameworks to allow for comprehensive and accessible compensation. It should acknowledge that citizens accepting vaccines are not only protecting themselves, but also the wider national and global community. With adequate regulation before use, the risk of doing so can be minimised and made clearer. But some risk remains, and those who run it deserve to be compensated for doing so. It is therefore imperative for Kenya to establish its own no-fault indemnity scheme for all state-approved vaccines, including those imported by the private sector.
This article draws from COVID-19 in Kenya: Global Health, Human Rights and the State in a time of Pandemic, a collaborative project involving Cardiff Law and Global Justice, the African Population and Health Research Centre, and the Katiba Institute, funded by the Arts and Humanities Research Council (UK).
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