Food Crimes: Why WFP Doesn’t Deserve the Nobel Peace Prize9 min read.
The UN’s food assistance agency has neither improved conditions for peace in conflict-affected countries nor prevented the use of hunger as a weapon of war. On the contrary, it is responsible for prolonging conflict in some countries and suppressing local food production in others.
Those who believe that food aid does more harm than good were probably flabbergasted by the decision by the Norwegian Nobel Committee to award this year’s Nobel Peace Prize to the World Food Programme (WFP) for “its efforts to combat hunger, for its contribution to bettering conditions for peace in conflict-affected areas and for acting as a driving force in efforts to prevent the use of hunger as a weapon of war and conflict”.
Fredrik S. Heffermehl, a Norwegian lawyer and long-time critic of the political and bureaucratic processes behind the awarding of the Nobel Peace Prize, for instance, stated: “We recognise the great value of the World Food Programme, but the 2020 prize is much less ambitious than [Alfred] Nobel’s idea of ‘conferring the greatest benefit to humankind’.”
Mukesh Kapila, a former United Nations representative to the Sudan who blew the whistle on atrocities committed by the Sudanese government in Darfur, and who is now a professor of global health and humanitarian affairs at the University of Manchester, was even more scathing. “It’s a bizarre choice, and it’s a complete waste of the prize, in my opinion,” he told Devex. “I don’t think the World Food Programme needs this money, and I really object to awarding prizes to people or organisations who are just doing their paid jobs.”
Apart from the fact that WFP’s raison d’être is to deliver food to vulnerable populations, and its staff are paid generously to deliver food aid, critics who know the food aid business have in the past pointed out that food aid is, in fact, detrimental in the long run because it suppresses local food production, making it harder for poor or conflict-ridden countries to feed themselves. In fact, studies have found that direct cash transfers are a much more efficient and effective method to alleviate hardship and improve the overall welfare of beneficiary communities.
A few years ago, none other than the European Union (EU)’s representative to Somalia, Georges-Marc André (now retired), admitted this to me when I was researching for my book War Crimes, which explores how foreign aid has negatively affected Somalia. He told me that United Nations agencies such as WFP might have actually “slowed down” Somalia’s recovery by focusing exclusively on food aid instead of supporting local farmers and markets. “The EU is against food aid that substitutes local food production,” he said.
His views are also shared by Michael Maren, a former food aid monitor for the United States Agency for International Development (USAID) in Somalia, whose book, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity, chronicles how aid became a political tool in Somalia that was manipulated by both the donors and the recipient country. Maren, who lived and worked in Somalia in the 1980s, believes that food aid to Somalia may have actually prolonged the civil war in the country. “I had learned to view development aid with skepticism, a skill I had hoped to put to good use to help ensure that aid projects, at worst, didn’t hurt people. But Somalia added a whole new dimension to my view of the aid business. My experience there made me see that aid could be worse than incompetent and inadvertently destructive. It could be positively evil,” he wrote.
In his book, Maren quotes a former civil servant working for Somalia’s National Refugee Commission during President Siad Barre’s regime who told him that traditionally, Somalis never relied on food aid, even during droughts. There was a credit system; pastoralists would come to urban areas where they would take out loans that they would repay when things returned to normal. Aid essentially destroyed a centuries-old system that built resilience and sustained communities during periods of hardship.
Food aid hurts local farmers
Food aid also suppresses local food production. Many Somali farmers have reported that NGOs working with WFP are notorious for bringing in food aid just before the harvest, which brings down the price of local food. They have also complained that the food aid is imported, rather than bought locally. At the height of the famine in Somalia in 2011 (which many believe was exaggerated by the UN), for example, WFP bought food worth £50 million from Glencore, a London-listed commodities trader, despite a pledge by the UN’s food agency that it would buy food from “very poor farmers who suffer because they are not connected to local markets”.
Let us be clear about one thing – food aid is big business and extremely beneficial to those donating it. (“Somebody always gets rich off a famine”, Maren told Might Magazine in 1997.) Under current United States law, for instance, almost all US food aid (worth billions of dollars) must be purchased in the US and at least half of it must be transported on US-flagged vessels.
Aid essentially destroyed a centuries-old system that built resilience and sustained communities during periods of hardship.
Most of this food aid is actually surplus food that Americans can’t consume domestically. Under the US government’s Food for Peace programme (formerly known as Public Law 480), the US government is allowed to sell or donate US food surpluses in order to alleviate hunger in other countries. Famines in other countries are, therefore, very profitable to the US government and to highly subsidised American farmers, who benefit from federal government commodity price guarantees. (Interestingly, since 1992, all WFP Executive Directors have been US citizens. This could be because the US is the largest contributor to WFP, but it could also be that the Executive Director of the UN’s food agency is expected to promote US policies regarding food aid.)
In a 1988 paper titled “How American Food Aid Keeps the Third World Hungry”, Juliana Geran described Food for Peace as “the most harmful programs of aid to Third World countries”, and urged the US government to discontinue it. She noted that US food aid often distorts local markets and disrupts agricultural activity in recipient countries.
For example, massive dumping of wheat in India in the 1950s and ‘60s disrupted India’s agriculture. In 1982, Peru “begged” the US Department of Agriculture not to send any more rice to the country as it was feared that the rice would glut the local market and drive down food prices for farmers who were already struggling. “But the US rice lobby turned up the heat on Washington and the Peruvian government was told that it could either take the rice or receive no food at all,” wrote Geran.
But what happened in Guatemala was truly catastrophic, as Geran narrates: “In 1976, an earthquake hit Guatemala, killing 23,000 people and leaving over a million homeless. Just prior to the disaster, the country had harvested one of the largest wheat crops on record, and food was plentiful. As earthquake relief, the US rushed 27,000 metric tons of wheat to Guatemala. The US gift knocked the bottom out of the local grain markets and depressed food prices so much that it was harder for villagers to recover. The Guatemalan government ultimately barred the import of more basic grains.”
Stealing food to aid militias
One of the most evident distortions caused by food aid (apart from the fact that farmers have no incentive to grow food when the market is flooded with free food) is the temptation to steal it. There have been reports of blatant theft of food aid under the not-so-watchful eyes of WFP. UN monitors have routinely reported the theft of food aid to Somalia, for example, but to no avail. In its 2010 report, for instance, the UN Monitoring Group on Somalia and Eritrea reported that local NGOs (known in development circles as “implementing partners”), WFP personnel and armed groups that controlled areas where food aid was being distributed were diverting up to half of the food. WFP vehemently denied these allegations, even though an Associated Press report the following year showed American, Japanese and Kuwaiti food aid being openly sold in Mogadishu’s markets.
It is also important to remember that WFP’s international staff usually do not distribute food directly in conflict or disaster zones; instead they hire local NGOs to do the work. Many of these NGOs are not vetted; in fact, in Somalia, some of them have even been linked to militias who act as “gatekeepers”, deciding who gets the aid and who doesn’t.
When Maren was in charge of monitoring food aid donated by the US government to refugees fleeing the Ogaden war of 1977-78, he found that about two-thirds of the food went missing. Trucks would arrive at the Mogadishu port, collect the food and disappear, never to be found again. Even when food arrived at the refugee camps, much of it would be stolen.
Aid thus became a profitable source of income for criminal elements within Somalia. And Siad Barre learned to exploit this well. In fact, Maren believes that international aid not only sustained the dictator’s regime but also facilitated the unravelling of Somali society.
The looting of aid continued even after Barre was ousted in 1991. Battles between warlords were won or lost depending on how much aid each warlord had access to. However, it was not just the warlords who profited from food aid; corrupt NGO cartels also benefitted. Because many parts of Somalia were considered a no-go-zone by international humanitarian agencies, and therefore rendered inaccessible, enterprising Somalis formed NGOs that liaised with these agencies to provide humanitarian assistance and services on the ground. These businesses-cum-NGOs signed lucrative contracts with aid agencies; some controlled entire sectors of the aid industry, from transport to distribution. Others were run by warlords, who often diverted food aid, which was then sold openly in markets to fund their militias.
“By engaging with the warlords to ensure the delivery of aid, the United Nations and other actors only encouraged the spread of the conflict and the establishment of a thriving aid-based and black market economy,” wrote political scientist Kate Seaman in Globalizing Somalia: Multilateral, International and Transactional Repercussions of Conflicts. “In essence they became a party to the conflict, losing their neutrality and only serving to perpetuate the conflict by providing resources which were then manipulated by the multitude of armed groups operating within Somalia.”
Battles between warlords were won or lost depending on how much aid each warlord had access to. However, it was not just the warlords who profited from food aid; corrupt NGO cartels also benefitted.
When an international humanitarian agency comes in to provide food to starving people, bad governments are let off the hook, and are allowed to continue with their bad policies that can lead to more famines in the future. Internationalising the responsibility of food security to UN institutions, international NGOs and foreign governments makes practically everyone across the globe a stakeholder in famine relief. “The process of internationalisation is the key to the appropriation of power by international institutions and the retreat from domestic accountability in famine-vulnerable countries,” wrote Alex de Waal in his book Famine Crimes: Politics and the Disaster Relief Industry in Africa.
Bad management practices at WFP
If the Norwegian Nobel Committee had bothered to find out how WFP staff view the organisation they work for, it might not have been so quick to award WFP the prestigious Nobel Peace Prize. Like at many UN agencies, senior staff at WFP have been accused of abusing their authority, an allegation that has tarnished this Rome-based agency’s reputation. A confidential internal WFP survey of staff attitudes (whose findings were first leaked to the Italian Insider, and then to other news organisations, such as Foreign Policy in October last year) found that 35 per cent of the more than 8,000 WFP employees surveyed reported experiencing or witnessing some form of abuse of authority, the most typical being the granting of “preferential treatment” for recruitment to close associates.
“The senior leadership of the World Food Program – once one of the most highly regarded United Nations agencies – have abused their authority, committed or enabled harassment, discriminated against women and ethnic minorities, and retaliated against those who spoke up in protest,” wrote Colum Lynch in Foreign Policy on 8 October 2019.
What was evident in the survey was that WFP, like the rest of the UN, is extremely hierarchical and authoritarian. Respondents admitted that senior managers “aimed to further their own self-interest rather than the mission of WFP, and abuse their power to further themselves and their favorites”.
Moreover, 29 per cent of those surveyed said they had witnessed some form of harassment, while 23 per cent said they had encountered discrimination. Some 12 per cent of staff said they had experienced some form of retaliation for speaking up about abusive practices (which is fairly common in the UN, where protection for whistleblowers is virtually non-existent, as I have illustrated here). An even more alarming finding was that 28 of the WFP employees interviewed had experienced “rape, attempted rape or other sexual assault” while working at the agency.
What was evident in the survey was that WFP, like the rest of the UN, is extremely hierarchical and authoritarian. Respondents admitted that senior managers “aimed to further their own self-interest rather than the mission of WFP, and abuse their power to further themselves and their favorites”.
The results of the WFP survey (which was conducted by an independent management consultancy) are consistent with other UN surveys on staff attitudes and experiences. Results from a UN Staff Union survey conducted in 2018 in response to the #MeToo movement showed that sexual harassment made up about 16 per cent of all forms of harassment at the UN; 44 per cent of those surveyed said that they had experienced abuse of authority and 20 per cent felt that they had experienced retaliation after reporting misconduct. The survey also found that a large number of staff members’ complaints were never investigated.
It is, therefore, difficult to understand why the Norwegian Nobel Committee found it fit to award WFP the Nobel Peace Prize, given that the UN’s food agency has failed to adhere to almost all best practices in human resources management, and has not done enough to protect those who report internal abuse or wrongdoing. Nor has WFP improved conditions for peace in conflict-affected countries or prevented the use of hunger as a weapon of war, as I have illustrated above.
What then could have motivated the Committee to award WFP the prestigious Nobel Peace Prize – apart from some misguided notion that what the world needs most right now is food hand-outs? In a world that is being ravaged by the coronavirus pandemic, increasing xenophobia, racism and sexism, a global recession and climate change (all of which threaten peace and security), couldn’t the Committee have picked a more worthy candidate?
Support The Elephant.
The Elephant is helping to build a truly public platform, while producing consistent, quality investigations, opinions and analysis. The Elephant cannot survive and grow without your participation. Now, more than ever, it is vital for The Elephant to reach as many people as possible.
Your support helps protect The Elephant's independence and it means we can continue keeping the democratic space free, open and robust. Every contribution, however big or small, is so valuable for our collective future.
How Bureaucracy Is Locking Kenya Out of Transshipment Business
But for the bureaucracy bedevilling Kenya’s shipping sector, Indian Ocean Island nations could look to Lamu for transhipment while Mombasa has the capacity to attract major shipping lines in order to tap into this emerging business.
The transshipment business, which involves the handling of cargo for other ports, is now an area of keen focus for many ports the world over. However, administrative bottlenecks created by the Kenya Revenue Authority (KRA) have stymied Kenya’s transshipment business even as the Mombasa and Lamu ports face increasing competition from the other regional ports that are modernizing their operations even as new ones emerge.
But the tide is set to change if the new Managing Director of Kenya Ports Authority (KPA) Captain William Ruto makes real his promise to confront the issues that have made it difficult for the port to tap into an emerging business line that has led to the growth of other successful ports.
Ruto has indicated that he will impress upon the KRA to simplify their procedures by adopting industry standards practiced elsewhere—such as at the Tangier Med port in Morocco, where 85 per cent of the cargo handled is for other ports, translating to 7.17 million Twenty-Foot Equivalent Units (TEUs).
In an ideal situation, according to the new MD, the KRA is only supposed to approve the ship manifests once the shipping lines lodges them online, which in not the case in Kenya where the KPA is required to physically handle the transshipment containers that are landed at the ports. According to global standards, however, shipping lines, are only required to give notification of the ships that will carry the transshipment containers from the ports to the final destination. Simplified procedures have seen ports such as Singapore and Salalah in Oman handle over 90 per cent of their cargo as transshipment.
The port of Mombasa handled 1.43 million TEUs in 2021 compared with 1.35 million TEUs handled in the same period in 2020, representing an increase of 75,986 TEUs or 5.6 per cent. However, the KPA’s transshipment traffic was at an abysmal level, recording only 220,489 TEUs in 2021, a slight increase compared to the 175,827 TEUs recorded in 2020.
Lamu Port has the potential to become the biggest competitor to Salalah Port in Oman and the Port of Durban in South Africa in the transshipment business. Mombasa is also better placed than Durban to handle transshipments from Europe, China, and Singapore, all major world exporting countries; smaller vessels can be used to move cargo from the port of Mombasa to others on the Southern African coast.
Lamu Port could attract transshipment cargo for Tanzania, Mombasa, Somalia, and the Indian Oceans Islands of Comoros, Madagascar, Seychelles, and South Africa.
Although the KPA has striven to market Mombasa as a transshipment hub, reforms to tap into the business have been painstakingly slow even though the increased infrastructure at the port of Mombasa—dredging of the channel, rehabilitation of the berths, and the construction of the second container terminal—has increased the potential of the Mombasa port to handle more transshipment cargo.
Over seven years ago, a joint task force of the KPA and the KRA created a working template to increase the transshipment volume after collecting views from all the stakeholders involved in this trade and recommended a major transformation that, once fully implemented, would have seen more shipping lines find Mombasa port attractive for transshipment cargo.
In 2015, the joint task force visited three ports in Europe, Asia, and Africa that were close to Mombasa in size—and which have recorded significant growth in transshipment—to gather guiding lessons for the Mombasa port transshipment initiative. The selected ports were Tangier Med in MorrocoMorocco, Colombo in Sri Lanka, and Malta’s Freeport.
According to the team’s report, one of the major factors for the success of these ports is the manner in which they have simplified the processing of transshipment cargo, a vital lesson that Kenya, which has been associated with lengthy processes, could embrace. When the team visited the three ports iIn 2015, the transshipment process in Malta took less than 24 hours to approve, Colombo and Tangier Med both took less than 12 hours, whereas at the port of Mombasa it took 8 to 10 days.
“The shipping business is a complex affair that rides on predictable trends,” said Captain Ruto, a member of the delegation.
In all the ports visited, the transshipment business has been simplified through the use of Electronic Data Interchange (EDI) for faster clearance and approvals. Shipping lines in the three ports are only required to lodge manifests with customs for approval whereas in Kenya nine steps are involved, causing delays, with the ships earmarked to deliver cargo departing without loading the containers.
“The shipping business is a complex affair that rides on predictable trends.”
Delaying a ship is very costly and the daily average additional vessel operating costs incurred by shipping lines can range between US$20,000 and US$35,000 depending on vessel size, a demonstration of how crucial it is for lines to save time in the shipping industry.
Kenya has made significant strides following the fact-finding mission to the three ports. Vessel processing at Mombasa port went paperless when the Single Maritime Window System went live in June 2021, allowing shipping lines to lodge documents online and thus significantly improving clearing and turnaround times.
KenTrade, which runs the online cargo clearing system, worked with the Kenya Maritime Authority (KMA) to implement the system that facilitates ship clearance procedures by providing a single online portal for the sharing of information on the arrival, stay and departure of ships between the shipping lines/agents and the approving government agencies involved.
Since 8 April 2019, it is a mandatory requirement for national governments to introduce electronic information exchange between ships and ports. The objective is to make cross-border trade simpler and the logistics chain more efficient for the over 10 billion tons of goods that are traded by sea annually across the globe.
The requirement is part of a package of amendments in the revised Annex to the International Maritime Organization’s Convention on Facilitation of International Maritime Traffic (FAL Convention) adopted in 2016. It is intended to reduce or eliminate the manual, decentralized, duplicated, and unnecessarily lengthy processes in the maritime sector, which are affecting ships’ turnaround times and increasing costs at the port of Mombasa.
The FAL Convention recommends the use of the “single window” concept whereby the agencies and authorities involved exchange data via a single point of contact.
Another advantage of Mombasa as a transshipment hub is its capacity to attract major shipping lines. There are over 20 shipping lines currently using the port at Mombasa, the majority of which handle containers.
But what should concern Kenya most is the growing competition that is coming with the development of other regional ports and the emergencemergencee of new ones. Tanzania is inching closer to realizing several plans and strategies that have been initiated over the years to enhance its potential as a maritime country.
There are over 20 shipping lines currently using the port at Mombasa, the majority of which handle containers.
The country has direct access to the Indian Ocean, with a long coastline of about 1,424km at the centre of the east coast of Africa. It has the potential to become the least-cost trade and logistics facilitation hub of the Great Lakes region.
There is the planned expansion and modernization of Dar es Salaam port under the Dar es Salaam Maritime Gateway Project (DMGP). The DMGP will increase Dar es Salaam port’s capacity from the current 15 million metric tonnes annually to 28 million tonnes.
The improvement of maritime hard infrastructure has gone hand in hand with the overhauling of the soft infrastructure. The Tanzanian government has already introduced electronic systems that have made cargo processing and clearing easier. These systems include the electronic single window, which has reduced paperwork and has also removed the need to physically visit multiple government agencies and regulatory bodies to lodge documents as all this can be done digitally through the Tanzania Customs Integrated System (Tancis).
In May 2016, global port mega-operator DP World agreed to develop Berbera Port in Somaliland and manage the facility for 30 years, a move that is set to make it the most modern port in the Horn of Africa. Ethiopia has acquired a 19 per cent stake in the project, the other partners being DP World, with a 51 per cent share, and Somaliland with a 30 per cent share. The total investment of the two-phased project will reach US$442 million. DP World will also create an economic free zone in the surrounding area, targeting a range of companies in sectors from logistics to manufacturing, and a road-based economic corridor connecting Berbera with Ethiopia.
Port Berbera is now the closest sea route to landlocked Ethiopia, a journey of 11 hours by road. It has opened the route needed for growth in the import and export of livestock and agricultural produce.
Djibouti has undertaken significant developments in all its ports. The Djibouti International Free Trade Zone (DIFTZ) was officially inaugurated in July 2018. The initial phase, a 240-hectare zone, is the result of a US$370 million investment and consists of three functional blocks located close to all of Djibouti’s major ports.
The project has also created major business opportunities for Djibouti and East Africa as the region’s export manufacturing and processing capacity is expanded in key sectors such as food, automotive parts, textiles and packaging.
The Djibouti ports of Doraleh Multipurpose, Ghoubet and Tadjourah have all been completed in recent years. Doraleh Port is particularly strategically located, connecting Asia, Africa, and Europe. It can handle two and six million tonnes of cargo a year at its bulk terminal and breakbulk terminal, respectively.
Port Berbera is now the closest sea route to landlocked Ethiopia, a journey of 11 hours by road.
Another key milestone for the Djibouti ports is the standard gauge railway (SGR). A 750-kilometer SGR line connecting Addis Ababa with the ports in Djibouti has been constructed, cutting a three-day journey down to 12 hours.
Djibouti has also received global attention due to its strategic location. Virtually, all of the sea trade between Asia and Europe passes through the Red Sea on its way to or from the Suez Canal. As a result, Gulf and Middle Eastern powers, China, the United States, and France have developed great interest in this route and the country today hosts 5 military bases.
Having made significant gains in automating cargo clearing procedures and also expanded the port of Mombasa by constructing a second container terminal and a new port in Lamu, there is great need for the KRA to work with the other industry players to simplify transhipment cargo procedures. The capacity of Lamu Port—which is ideal for transhipment cargo owing to its deeper channel that can receive bigger vessels—has been under-utilised. In spite of its strategic location as a transshipment hub, the port has received less than 20 vessels since the three berths were commissioned in May 2021.
The Perfect Tax: Land Value Taxation and the Housing Crisis in Kenya
The Kenyan government has proposed a compulsory housing levy from workers salaries to support contractors to build affordable homes for the working class. As incomes are squeezed and living standards collapse, Ambreena Manji and Jill Cottrell Ghai argue that the case for asking workers to bear the cost of housing development has not been made.
The proposal in section 76 of Kenya’s Finance Bill 2023 to amend the Employment Act 2007 so that employers will compulsorily deduct 3% from workers’ salaries and send that, plus a further 3% contributed by the employer, to the National Housing Development Fund has met with widespread consternation.
The levy is expected to raise around £460 million a year for the National Housing Corporation that administers the fund. Following legal action, earlier proposals for a housing levy under the previous regime had been made voluntary and set at a lower rate of 1.5%. Now, the 3% levy will begin with civil servants before being extended to other parts of the formal and non-formal sectors.
The money will be used both to support developers and building contractors to build 200,000 affordable units and to subsidise mortgages for low- and middle-income households who would be offered an interest rate of 7%, half the market rate. By some calculations, affected employees’ net monthly salaries will be cut by about 52% when all statutory deductions including tax, the National Health Insurance Fund and the National Social Security Fund, as well as this new deduction, are taken into account.
Trade unions have spoken out against the levy, arguing that a variation in employment law cannot be imposed without consultations. The Kenya Constitution of 2010, Article 118, says that Parliament must facilitate public participation in its legislative work.
According to the 2022 Kenya Economic Survey, there were 2,907,300 employed in the formal sector and an annual rate of affordable home construction by the national government of around 500 units a year. It is not clear under the Constitution that the national government has this responsibility, as opposed to the devolved government at county level.
Kenya’s skewed land ownership
Whilst there is manifestly a need to address Kenya’s dire shortage of affordable homes, it is important to diagnose fully the reasons for this. Land shortages and the high costs of building materials are important causes as Steve Biko Wafula has argued. Kenya’s skewed land ownership is attributable to long-term land grabbing, going back to the colonial period. Importantly, one constitutional provision designed to address this – which calls for the development of minimum and maximum land ceiling laws – has been studiously ignored, especially the setting of a maximum holding. The housing levy will not address this problem: it cannot increase the supply of land for housing.
The levy is designed to encourage developers to enter the affordable housing market by offering them lower land and construction costs and providing tax exemptions, as well as guaranteeing contracts with the government. However, Wafula has also pointed out that the administration of the housing fund is not clear because it relies ‘on a complex system of collection, allocation, and disbursement of funds that could be prone to errors, delays, and fraud’.
Moreover, Kenyans have seen funds such as the National Housing Development Fund used as a revenue kitty. The 2005 Ndung’u report on Illegal and Irregular Allocation of Public Land detailed how state corporations were in effect forced into buying grabbed land, as ‘captive buyers of land from politically connected allottees’. The primary state corporation targeted to purchase land was the Kenyan workers’ pension scheme, the National Social Security Fund (NSSF). It spent Ksh30 billion (£175 million) between 1990 and 1995 on the purchase of illegally acquired property.
At a time when the government is desperate to increase its resources through raising taxes, Kenyans are also understandably suspicious that some of this money, at least, will end up in general government coffers rather than in the fund for which it is statutorily earmarked – other than that which ends up in party or private pockets, of course.
Whilst some prospective home-owners may be lured by the offer of lower interest rates and longer repayment plans, the proposed fund is also being seen as an unwelcome compulsory saving scheme. Funding can be drawn down after seven years or at retirement whichever is the sooner. But with standards of living being severely squeezed by inflation and with longstanding constraints on wages, as well as existing deductions which yield little benefit, many households will struggle to take a further cut to their take home pay.
Indeed, government workers were not paid their salaries earlier this year due to cash flow problems caused by the country’s mounting debt. It is ironic then that the proposal is in effect asking Kenyans formally to agree to defer a portion of their wages. Furthermore, because contributions are payable from income that has already been taxed and are taxed again when the funds are drawn down, workers are exposed to double taxation.
Workers are being asked to stake their long-term security on the success of a housing fund about which many have unanswered questions. If the promised housing materialises, how can we be sure that it will not be developers and landlords who benefit rather than the intended beneficiaries? There are real prospects that the housing units will be taken up by landlords and that Kenyan workers – having already accepted lower wages because of the housing levy deduction – could still find they have to pay high rents to access housing. What guarantees will there be that the housing will not be financialised in such a way as to put the notion of housing – as shelter and personal security – at grave risk?
Building on Serap Saritas Oran’s work on the financialisation of pensions in Turkey which theorises pensions from a political economy perspective and argues that pensions are fundamental to working class standards of living, we can see how the housing levy proposal similarly financialises a right to housing. Housing is a critical factor in social reproduction, that is, in how life is maintained and labour power reproduced. Turning housing from what Oran calls ‘a social right’ into an individualised personal investment, the levy creates opportunities for speculation and extraction. In this schema, there is a real risk that some who should be the beneficiaries of affordable housing will find that because of interest rates or the accrual of high rent arrears, they in fact become debtors.
We recognise that providing affordable housing is an important goal but we believe other, much fairer ways of raising much needed revenue for housing should be considered.
Might the time have come to have a well-informed national conversation about Land Value Taxation? Given Kenya’s worsening gini coefficient which demonstrates how skewed the country’s wealth is, why should workers bear the brunt of the government’s house building programme?
Land Value Taxation is a progressive tax which ensures that the tax burden is instead borne by landowners who can well afford it. Because land ownership generally correlates with wealth and income, it is much fairer to require those already advantaged to fund the needs of those who do not yet have homes.
Land Value Capture should also be considered. This taxation can be used for example if a road is built or other infrastructure such as a park is improved, causing a rise in the value of neighbouring properties. The principle is that these property owners should share some of their unearned gain with the public.
Elsewhere in the world, funds raised in this way have been used to build lower-cost housing. In addition, the money raised could also be used to fund ongoing operational costs such as maintenance of local roads, schools, and parks. Wouldn’t that be a fair and – given the infrastructure boom of recent years which has bestowed windfall gains on many property owners – very effective way to tackle the shortfall in affordable housing?
A raid on wages
Speaking on Kenya’s NTV news channel Mercy Nabwire, Kenya Medical Pharmacy and Dentistry Practitioners Union National Treasurer, recently described the proposed housing levy as ‘a raid on workers’ wages.’ The economy is in bad shape and public services are threadbare, but the case for asking workers to bear the cost of righting this – especially when their incomes are squeezed and their standard of living plummeting – has not been made. Still less the case for compelling them to surrender their already precarious wages for some nebulous future promise.
This article was first published by ROAPE.
America’s Failure in Africa
It is evident that only an investment of this type – in capital, in human resources and in qualified training – can allow the United States to leave a real mark of progress in Africa, following a counterpoint strategy to that of China.
Gone are the days when Melania Trump traveled to Africa in tropical colonial clothes, showing the complete lack of interest of the United States, led by her husband, in the continent. Since then, official American policy has changed significantly.
Africa is, once again, a continent disputed by the great powers. This dispute results from the new race for raw materials and markets, the search for influence in the world chess, namely African votes in the United Nations, and also the presentation of a social laboratory to show the world which recipe for prosperity works best. : the developmental authoritarian Asian or the liberal western.
All of this, in the context of the new competitive dispute with China, led the United States to once again focus its attention on Africa and place it at the forefront of its foreign policy priorities.
In recent months, American initiatives related to Africa and the trips of high dignitaries have been constant. Vice President Kamala Harris, Secretary of the Treasury Janet Yellen, First Lady Jill Biden, to mention just the most important recent trips (Harris, March 2023; Yellen, January 2023; Biden , February 2023). Only Joe Biden’s tour is missing to culminate this high-level political-diplomatic offensive.
However, the impression that remains from these trips is that, apart from beautiful speeches, splendid photographic opportunities and some circumstantial financial support, they add nothing to the resolution of African problems and, above all, they do not diminish the supposed Chinese influence, nor do they oppose it.
The problem is in the model adopted by the Americans. It is a model that is not very interactive and does not address African structural problems. Essentially, US leaders distribute smiles and marketing, warn of the Chinese danger, announce small foreign aid and refer the big questions to the International Monetary Fund (IMF), talking with greater or lesser intensity about good governance. Janet Yellen’s visit to Zambia was emblematic of this failure. When Hichilema was elected, he became a sort of poster boy for American good intentions.
However, what is certain is that Zambia has a serious foreign debt problem and has defaulted, finding itself in an endless labyrinth between China and the IMF, which ends up greatly harming the population. It is not enough to say that China is to blame and order the IMF to move forward, which in turn makes everything depend on agreements with China, which is waiting for the country to agree with the other creditors, getting into a tailspin – prolonged pong.
This kind of attitude will only lead to the US being criticized for talking but doing nothing.
The truth is that China’s entry into Africa from the 2000s onwards was not due to any historical relationship, practically irrelevant, but to a void, a void left by the West. Now, it is this void that persists, despite the new rhetoric and the countless initiatives, trips and forums held in the American capital or in Europe.
Africa does not need economists with their Harvard and MIT textbooks, which apply recipes from developed market economies unable to serve African populations and leading to their impoverishment. The manual to be applied must be the previous one, that of the very creation and structuring of economies and markets. Bringing consultants, economists, managers and people of intentions ashore doesn’t help – it only complicates things.
Obviously, to be successful, the North American perspective has to be different, resembling what was done in Europe after the Second World War (1939-1945). In other words, launching their money helicopters over Africa, while creating domestic markets on the continent.
Very simply put, the US will only compete with the Chinese in Africa if it replaces them, if it spends money. Arriving in Africa empty-handed or with promises of future private investment, which may or may not materialize, is no use.
Strictly speaking, if they really want to help Africa, the Americans should start by swapping the Chinese debt, that is, lending financial funds to African governments at lower interest rates and higher maturities, so that governments pay China. In this way it would certainly be possible to introduce competition into the African debt market and remove the monopoly from China.
In the same vein is the financial support for structural projects on the continent, from the massification of electricity and basic sanitation to digitization.
It is clear that the American people may disagree with this option and politicians may not want to embrace it, but the only realistic path is this and not another — this is how the US has gained influence in the past.
Furthermore, in addition to real capital, Africa needs specialists: not economists or consultants, which are in abundance, but professionals in essential areas, such as doctors, nurses, engineers, IT professionals, teachers, etc.
It is necessary to recover the initial spirit of the Peace Corps, idealized by President Kennedy, and massively send to Africa “men and women from the United States qualified for service abroad and available to serve, if necessary under difficult conditions, to help people in areas that help countries meet their needs” (Peace Corps Goals).
Finally, good governance should not focus on the constitutional apparatus, but on something simpler and more fundamental: public administration.
What is essential is to prepare public administrations in African countries to function efficiently and effectively, even if governments do not meet their objectives. Shifting the focus of good governance from the executive to the administration is a structuring element of any functioning society, overcoming disagreements and fears of political interference.
It is evident that only an investment of this type – in capital, in human resources and in qualified training – can allow the United States to leave a real mark of progress in Africa, following a counterpoint strategy to that of China. Otherwise, good intentions will be just that: good intentions without results.
Op-Eds2 weeks ago
How Bureaucracy Is Locking Kenya Out of Transshipment Business
Politics2 weeks ago
Pattern of Life and Death: Camp Simba and the US War on Terror
Culture2 weeks ago
Davido’s Timeless Misses the Dial
Ideas1 week ago
The Continued Relevance of Pan-African Marxism in a Time of Crisis
Ideas1 week ago
Samir Amin’s Radical Political Economy
Culture1 week ago
Kenyan Digital Avatars: Cartoonification of Culture and Heritage
Politics1 week ago
The Dictatorship of the Church
Culture7 days ago
Race and Empire: How Scientific Racism Shaped Kenya