Pertinent Issues on the War in Tigray9 min read.
The Ethio-Eritrean war against the people of Tigray has entered a new phase, following the decision of the Government of the National Regional State of Tigray to redeploy its forces to the borders of Tigray, announced by the leadership on December 19. For the people of Tigray, it is fundamentally a war for survival.
December 24, 2021
The aims of the leadership of Tigray in the war in Ethiopia are, first, to save the people of Tigray from a genocidal onslaught including forced starvation and, second, to establish an all-inclusive government for Ethiopia as a whole. There is no intention to install a government in Addis Ababa led by the Tigray People’s Liberation Front (TPLF). Instead, we want the people of Tigray to govern themselves within a multi-national federal system.
Eleven months ago after the first round of fighting in which, the people of Tigray were facing a coordinated campaign of destruction from the governments in Ethiopia and Eritrea, the leadership of Tigray, including the TPLF and others, met together to decide how to respond. The Central Command was established to serve as the highest decision making body with regard to the war effort. The Central Command under the regional government of Tigray is leading the whole war effort including the activities of the TDF (Tigray Defense Forces) up to now. I am a member of the Central Command but the views I am expressing here are my personal views and should not be taken to reflect the views of the Tigray Government and Central Command.
In June, after our forces liberated most of Tigray, the Central Command issued an eight point proposal for talks with the Federal Government of Prime Minister Abiy Ahmed, which we hoped would lead to a ceasefire and a peaceful settlement. Abiy did not respond to those proposals and continually rejected the efforts of international interlocutors. He refused to meet our non-negotiable precondition which is ending the war crime of starvation by permitting humanitarian aid and restoring essential services.
Although the starvation of our people is not on your television screens, it is real. Every day, children and their mothers are perishing of hunger. Our people are dying needlessly from treatable diseases because our hospitals have no medicine. Abiy made it perfectly clear that he intended to crush the sprite of resistance to subjugation in Tigray through a starvation siege. In this context the Central Command took the decision to pursue the war, joining forces with other groups to establish a United Front. This includes organizations from Oromo, Somali, Afar, Agaw and others. The biggest of these groups is the Oromo Liberation Army. There was and still is a desire to include other political forces including Amhara political forces as well.
We are fighting to protect the principles of the Federal Constitution of Ethiopia, starting with the cherished affirmation that sovereign legitimacy resides in the nations, nationalities and peoples of Ethiopia. Abiy, on the other hand, is fighting to overturn the constitution. The Amhara elites continually talk about an Ethiopia that is greater than its people. They are ready to kill for this ideology and they are sending thousands of young people to die for it. These elites claim legitimacy for their group only, looking backwards to the era when Ethiopia was an Amhara-ruled empire. We have experienced this kind of ultra-nationalism in the past and it neither secured national territorial integrity nor protected the central government from collapse. Instead, the project of a centralized Ethiopian empire led to war and destruction in all corners of our country. This was why the 1995 Ethiopian constitution, which remains in place today, defines the country as the voluntary unity of its peoples within a federal system.
The Tigray Central Command pursued the war in order to compel the government to negotiate on equal terms and, failing that, to replace it with an all-inclusive Transitional Government. Foreign and domestic political forces were apprehensive of a “repeat of 1991”, referring to the military victory of the TPLF and its coalition partners in that year. We made it clear that the political landscape both in Tigray and Ethiopia have changed so much so that there is no option for such a scenario. Moreover, Tigray cannot shoulder the responsibility for reconstituting the Ethiopian state, especially so without any agreed domestic political arrangement and clear international support.
Our political discussions within the United Front and other political forces which were yet to be part of the coalition were proceeding more slowly than our military advance, which reached the outskirts of the city of Debre Birhan, just 145 km from Addis Ababa. The prospect that we would march into the capital city caused panic mainly among the internationals and to some extent Ethiopians as well. We understand that fear. We also want those who are dismayed about the safety of the capital to understand the intolerable suffering and the threat of continuing genocide that the Tigrayan people are living under every day.
This was the reason for our decision to march towards Addis Ababa. We hoped the political developments, both international and domestic, would catch up by then as well. This did not happen.
We appreciate that many around the world, including the U.S., the European Union, and the international media, have exposed the grievous violations against our people and demanded that they stop. We were hopeful that the matter would be raised at the UN Security Council which would act on its obligations to uphold fundamental norms about humanity and act energetically to promote a peaceful resolution of the conflict. But China and Russia consistently blocked any efforts. It appears to us that they did so because they saw the war in terms of the balance of geo-strategic power, and sacrificed principles for political point-scoring, abandoning people to die out of their narrow mindedness.
Regrettably, Western nations’ actions did not go beyond rhetoric. They appealed for a cessation of hostilities and for humanitarian access, but in practice these were empty gestures. They did not use the diplomatic and economic tools in their hands. Worse, the rhetoric of western governments and the silence of the African Union gave Abiy the pretext to adopt slogans of anti-imperialism and pan-Africanism which in turn allowed China and Russia, along with Iran, Turkey and the UAE, to sell arms. Tigray got words, Abiy got weapons.
The best that can be said for those supporting Abiy is that his backers believe they are protecting the Ethiopian state from collapse. They are misinformed. They are saving a government in name only. Our forces encounter this on the battlefield: the Ethiopian National Defense Force is kitted out in uniforms and has modern equipment, ranks and units, but it fights like a rag-tag horde of feudal levies, backed by an air force and drones supplied by foreigners. Administrative structures have collapsed across the country. Salaries are not paid, schoolchildren are sent to harvest the fields. The foreign ministry has been replaced by campaigns on Twitter and Facebook. The peace and security architecture for the Horn, which was painstakingly built by Ethiopia’s diplomats and peacekeepers in partnership with the African Union and United Nations, has been summarily demolished.
In fact, Abiy is implementing the blueprint of Isaias Afwerki, dictator of Eritrea. This is to build a trio of autocrats: Isaias, Abiy and the Somali president Mohamed Farmaajo. For Ethiopia this means a dictator in Addis Ababa ruling over a weak and fragmented state, all under the heel of Eritrea.
The Ethiopian state under Abiy Ahmed and his Amhara interlocutors is being used as a Trojan Horse for the unbridled and oversized ambition of Isaias Afewerki, who he himself is serving as an agent of the Middle Eastern countries. I would like to make one thing clear, if the resistance in Tigray is crushed by the combined forces of the Ethiopian federal government, Amhara forces, and their backers in the Middle East (Turkey, UAE, and Iran) the floodgates for Isaias to implement his blueprint will be open. The region of the Horn of Africa will be run as per the dictat of the Eritrean dictator. Is the international community, Africa and the region willing to live with the impending scenario? If the answer to the question posed is no, the time to act is now.
The Ethiopian government has begged and borrowed and sold its assets to get arms from foreign powers who have little knowledge about the country and less goodwill. No amount of jingoistic rhetoric can conceal that Abiy has made Ethiopia into a beggar. Those who are putting coins on his plate today will want him to sing for them tomorrow.
Where Middle Eastern powers have poured in their weapons and money, and the international community has recognized a government in name only, we do not see stability. In Libya, Syria and Yemen we see the reality of state collapse. The government becomes a client of its biggest paymasters and the country becomes locked in unending conflict. We need to save Ethiopia from this fate.
The U.S. government expressed its serious concern over the maintenance and continuity of the Ethiopian state. It stated its intention to bring a rapid resolution to the war through negotiation. Washington DC openly opposed the advance of the TDF to Addis Ababa, threatening the government of Tigray with sanctions if our forces approached the city. On the other hand, the U.S. expressed no strategy (at least to us) to end the war except appeasing Abiy Ahmed with flattery. The policy of appeasement has not brought any solution before and it will not bring fast resolution of the conflict and save the Ethiopian state either.
In my opinion the fastest way to end the conflict has now evaporated.
In this context, the TDF is fighting absolutely alone. It has no international allies and no military or other material assistance from abroad. Tigrayan people do not even receive humanitarian aid. The Tigrayan people are few, impoverished but gallant and with a strong sense of identity. We have a long and proud history of fighting against invaders of our land and we are repeating the heroic feats of our predecessors.
Our forces did not advance on Addis Ababa. In the last two weeks, the effects of swarms of drones on the TDF advanced positions and supply lines has been substantial. Personnel of Eritrean armored divisions are in daily combat within the ranks of the ENDF. Eritrean forces still occupy substantial parts of Tigray. In these circumstances, with long and vulnerable supply lines to our forces, and no effective international political process for a negotiated settlement, the Government of regional state of Tigray through the Central command decided to withdraw to defensive positions to consolidate our forces. A withdrawal under drone fire is a difficult military operation which we have accomplished successfully. We are undefeated.
Over the last few days, the Ethio-Eritrean coalition forces attempted to penetrate our lines, from south, west and east. They were repulsed with heavy losses. After these setbacks the regime in Addis Ababa announced that it had completed “phase one” of its operation and would not be continuing its attacks. This statement, coupled with the previously announced position of the National Regional Government of Tigray for a ceasefire, opens an opportunity for the international community, led by Kenya, to press for a cessation of hostilities and initiate peace talks.
If this does not happen, the war will continue not only in Tigray but in other places in Ethiopia as well. There will be more loss of lives; economic destruction and whatever political and social fabric that might have persisted up to now will be destroyed which means saving the Ethiopian multinational federal state as we know it becomes very difficult.
Now the regime of Abiy Ahmed could be preparing to initiate an “inclusive dialogue” controlled and monitored by itself. He is trying hard to make the world believe him he has “defeated the rebels” and would offer them to be part of this inclusive dialogue, as individuals not as the TPLF. Some in the international community might support his idea as well.
This process will not work. Any inclusive dialogue should be done by neutral bodies with the participation of the major political forces in Ethiopia sponsored and supported by the international community. The mechanism could be worked out with the assistance of experts on the field. We hope that African countries will rise to the challenge of hosting and facilitating the conference.
There must be a political solution to the war in Ethiopia. Whether this includes Abiy or not is secondary. What is important is that the human crisis facing the Tigrayan people is averted and that the settlement to this war should usher in stability, democracy and development.
My vision for this is as follows.
Tigray must stand on its feet and must have cast iron guarantees that the genocidal assaults of the last year will never, ever happen again. We shall rely on ourselves, as we have shown we can do, but we also rely on Africa and the international community to ensure that we are not alone if we ever again face enemies determined to destroy us.
Ethiopia is a nation of nations, and the only way forward for the country is to recognize this. There can be no return to empire-building or the domination of one group over another
Tigray is an ancient civilization, a place where Christianity has deep roots and where the peaceful coexistence and symbiosis between Muslims, Christians and Jews goes back fourteen centuries. Recognizing and preserving this is the foundation stone for stability for Ethiopia, our neighbors in the Horn of Africa, and the countries on the other shore of the Red Sea.
Tigray is an African nation. We have contributed to the birth of African civilization and we have contributed to the vision of an Africa that is stable, secure and independent from external powers, whether they be Europe, America, the Middle East or Asia. Tigrayans are proud of our contribution to Ethiopia’s diplomacy and peacekeeping which was a pillar of stability and development in the Horn of Africa region. We are proud of our contribution to regional economic integration including water, electricity and transport infrastructure joining neighboring countries.
The entire international community, including Russia, China, and all the countries in the Middle East, have a responsibility to humanity that should override whatever policy differences they may have with America and Europe. That same common responsibility extends to protecting a cultural heritage, by halting the war against a people who have been the custodian of this unique intersection of faiths and cultures.
The Horn of Africa is a region where the world’s great powers all have legitimate interests. The world needs maritime security, seeks to stamp out violent extremism, and wants to avert the specter of massive distress migration driven by conflict, famine and state collapse. We in Tigray recognize this. Given our proximity and history we want to be constructive player by securing our national interest and legitimate national interest of other player in the sub region. The world should not allow a repeat of Syria, Yemen or Libya in the Horn at the western flank of the Red Sea. This is not a zero-sum game. Ethiopia should be the place where these international and regional interests converge in a multilateral pact.
All Ethiopians need a ceasefire and political negotiations. Our political goals are clear and we have reiterated our proposal for a ceasefire. This may start with a freeze in combat—a cessation of hostilities. It must then develop into a full and permanent ceasefire, which is a complicated military operation requiring professionalism on both sides. An essential component of a ceasefire is third party monitoring and verification. Africa has extensive experience in this and we are confident that our African brothers will be able to provide the necessary expertise and capacity.
Ethiopia is unique but it is also an African country where Africa’s principles and wisdom are much needed. Over the last thirty years, beginning when I had the honor of serving as chief of staff of the Ethiopian National Defense Forces, Ethiopia has become an integral part of Africa’s peace and security architecture, extending our services in diplomacy and peacekeeping across the continent in a spirit of brotherhood and solidarity. We now call on our African brothers to reach out their hand in that same spirit.
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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.
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