Will Ruto Resist the Temptation to Marginalize Civil Society?9 min read.
William Ruto’s administration has an opportunity to distinguish itself from its predecessor as a defender of civil society’s independent role.
When scholars speak of “civil society”, they usually mean all organized groupings of people that are neither part of government nor part of business. Sometimes media groups are also included. Using this definition, Kenya’s civil society sector is rich and diverse. It ranges from neighbourhood chamas, to churches and mosques, to international NGOs with billion-shilling budgets. Yet it is the highly focused governance and democracy-promoting civil society organizations (CSOs) that usually have the most prominent voices in Kenya. Around the world, the 1990s heralded an “opening” of space for such organizations, but that space eventually began to close. Kenya is no exception to this experience.
There has also grown some confusion in the country about the role that civil society ought to play. In the 1990s, CSOs were perceived by wananchi as primarily interested in fairness, accountability, and human rights—not political power—as they pushed to make Kenya a democracy. But as the new millennium has unfolded, prominent CSO leaders have increasingly been seen as “taking sides” in the political arena, whether in supporting the International Criminal Court indictments and the challenge to the 2022 presidential results, or in themselves running for political office. Although most NGOs and community-based organizations remain apolitical, these changes can make CSOs in general appear to be less united with wananchi as a whole. And this leaves CSOs in a more precarious position.
With the new William Ruto administration, the country now sits at a possible inflection point. Will Ruto follow in the footsteps of his immediate predecessor, Uhuru Kenyatta, in threatening to close the space for CSOs, or might he take an approach similar to Mwai Kibaki, under whose leadership vocal Kenyan civil society largely thrived?
As a candidate, Ruto ran as a proponent of accountability. If he wishes to continue in the same vein as president, he will facilitate Kenyan civil society and free media. Doing so will not only help to guarantee his legacy among Kenyans, it will also help to retain Nairobi as a regional leader and an employment hub for the large Eastern Africa and Horn development sector. And it could bring more politicians with a CSO background to his side.
Here, we present a brief history of the space allowed for civil society over the past sixty-plus years and under the three previous administrations, followed by a discussion of possible trajectories for Ruto and their potential outcomes.
Kenya’s rich history of civil society since before independence
Kenya has had a reputation for being home to a strong civil society sector—arguably the strongest in East Africa. This reputation stems from the long-standing culture of harambee, which encourages people to work together to better the community. The sector has also grown in part out of the country’s religious communities. But it has also grown from the decolonization movements that included educational institutions, trade unions, and ethnic associations, among others fighting for self-rule.
Kenya’s CSOs are diverse, yet they all share at least one thing in common: the space in which they can operate is determined by government regulation—and sometimes by a government’s whims. During colonial times, space was exceedingly limited. The colonial government restricted education and assembly in order to maintain its illegitimate power. During the Jomo Kenyatta administration, local community based organizations and harambee groups were granted more space, but also something of a responsibility to provide self-help solutions.
Closed space: repression and resilience under Moi
For more than two decades, civil society was tightly controlled by the Daniel arap Moi administration. After the 1982 coup attempt, Moi learned to carefully monitor society for potential sources of alternative power, including from nongovernmental organizations and the media.
Given flat economic growth and increasing calls for economic liberalization and budget downsizing from powerful Western donors, however, Moi also recognized the benefits of some types of civil society actors. He recognized that they could provide social services like healthcare, education, and sanitation services where the state could not.
Moi skilfully developed regulations that allowed such apolitical service-provision organizations to offer needed services, while maintaining the ability to take credit for their work. At the same time, the creation of the governmental NGO Board in 1989 gave his administration an organizational authority to shut down or intimidate democracy, human rights, and governance organizations that he perceived as threatening him politically, while the NGO Act, passed in 1990, provided the legal justification. Media was similarly repressed while harambee organizations, meant to be an avenue for self-help, became politicized tools for support and mobilization.
Moi skilfully developed regulations that allowed such apolitical service-provision organizations to offer needed services, while maintaining the ability to take credit for their work.
Yet individual proponents of opening up the civic space, like Wangari Maathai, Oginga Odinga, and Kenneth Matiba, could not be fully deterred. Under Moi, they were largely based in professional organizations like the Law Society of Kenya, religious ones, like the National Council of Churches of Kenya, national movements like Greenbelt, or banned political parties like FORD. From these havens, they pushed for political opening and democracy for Kenyans.
And, importantly, they attracted popular support from wananchi wanting to live without fear of government. Activists and Kenyans together sought basic political and civic rights.
Opening space: CSOs in the Kibaki administration
When Mwai Kibaki came to power in 2002, he brought with him many allies from civil society. Kibaki’s regime not only hired many CSO leaders like Maina Kiai, Willy Mutunga, Kivutha Kibwana, and John Githongo into government, but also deliberately worked more openly with those who stayed in the third sector. Many thought Kibaki’s technocratic background allowed him to adopt a hands-off approach.
These strong relationships soured somewhat when Githongo was run out of the country in 2005. And tensions grew after the 2008 post-election violence, when some governance, human rights, and media leaders were harassed or restricted, and even murdered.
Yet Kibaki signed the Public Benefit Organization (PBO) Act of 2013 into law before leaving office. The progressive law, which aims to ensure transparency and accountability for organizations in Kenya, has been lauded by civil society advocates, but is yet to be operationalized nearly a decade later.
Further, beyond civil society leaders moving into administrative offices, during Kibaki’s time some civil society leaders began to seek their own political ambitions as well. New research shows that NGO work can act as a pipeline to politics for potential candidates by placing them in politics-adjacent roles and providing them with deep community connections and relevant expertise. Civic activism can align well with opposition politics. This trend of CSO activists making the leap into politics could erode a focus on human rights and the collective good. In seeking political advancement—especially in a country where MPs are among the highest paid in the world—former activists-turned-politicians may muddy the waters of civil society, blurring the line between governance and accountability.
Contracting space: Uhuru warns CSOs
The start of the Uhuru Kenyatta administration in March 2013 was in many ways overshadowed by the indictment in the preceding months of both Uhuru and his deputy, Ruto, at the International Criminal Court on charges of crimes against humanity in relation to the violence that followed the 2007 elections. Although service-providing civil society organizations were largely unaffected, and most NGOs stayed out of the conversation, many prominent governance and human rights organization leaders supported the ICC investigations. They petitioned for the courts to bar Uhuru and Ruto’s candidacy on account of the indictments and demanded that the trials move forward even after the two were in office. They focused on the worrying “culture of impunity” in the wake of the 2008 post-election violence.
This trend of CSO activists making the leap into politics could erode a focus on human rights and the collective good.
This had caused tension even before the 2013 election. Uhuru’s rhetoric troubled many CSOs as he supported calls for limits on foreign funding of NGOs. Public support for restrictions on NGO funding rose in some quarters as Uhuru supporters suggested that civil society had evolved into an “evil society.”
In the coming years, the space grew more hostile. Uhuru made sharp statements threatening to defund NGOs and restrict foreign worker permits. His administration also stridently refused to implement the PBO Act of 2013, even when ordered to do so by the High Court.
The administration was even willing to use the NGO Board, which the PBO Act abolishes, for political purposes. It sent harassing letters from the Board in an attempt to silence human rights and governance NGOs that had spoken out against Chris Msando’s brutal murder in the lead-up to the 2017 election.
These challenges were compounded by the government’s support of a controversial media bill which would have forced journalists to reveal their sources and, unsurprisingly, drew immediate protests. These efforts to restrict free expression led to reports that Kenya was experiencing significant free speech backsliding,
Yet these setbacks for civil society occurred as Kenyan legal institutions grew stronger. The courts’ empowerment culminated in the Supreme Court’s historic ruling on the 2017 election, annulling Uhuru’s win and requiring that the election be rerun. This dramatic democratic showing buoyed the CSO sector, reassuring governance groups that they were not operating alone, but rather had powerful allies on the march toward a stronger democracy. In so doing, however, did these prominent governance organizations increasingly politicize themselves?
New space: greater autonomy and accountability on the horizon?
The future prospects for Kenyan civil society now depend a great deal on how Ruto decides to lead. We see a unique opportunity for this new administration to distinguish itself from its predecessor as a defender of civil society’s independent role. In so doing, he may thwart further politicization of the sector.
Will President Ruto follow Candidate Ruto’s roadmap? While campaigning, Ruto worked hard to separate himself from prior administrations. He presented himself as an “outsider” candidate, immune to dynasty politics. His opposition to the Building Bridges Initiative suggested wariness of the strongman politics of years past and signalled an openness to robust government accountability, a point he has made at home and abroad.
Candidate Ruto appeared to extend a hand to civil society groups, in contrast to Uhuru’s contentious engagement with the sector. He promised that they would be free to operate without government interference. He explicitly invited them to hold the Kenya Kwanza government to account, referring to the sector as a key accountability mechanism, essential for good governance.
Yet during the same period, Candidate Ruto’s team was accused of media harassment that threatened progress toward a more robust democratic space for all. Prominent CSOs called for an opening of civic space with an eleven-point list of demands. They noted that Civicus, a global alliance of civil society organizations, had rated Kenyan civil society as “obstructed” while Ruto was deputy president.
The future prospects for Kenyan civil society now depend a great deal on how Ruto decides to lead.
It remains unclear what hand Ruto may have had in marginalizing civil society during the Kenyatta administration. And he may still harbour a grudge against CSOs for their support of the ICC trials. Regardless, the relationship between his administration and CSOs is off to a rocky start, as it is well known that prominent civil society groups strongly supported Ruto’s opponent, Raila Odinga, in the August general election. After the election, leading civil society activist (and The Elephant founder) John Githongo, claimed to have evidence that the IEBC could have been hacked easily. Githongo’s affidavit, which the court ruled could amount to perjury, was a prominent part of the larger, unsuccessful, effort to overturn Ruto’s win.
Moreover, compared to past periods, activists such as Githongo and Boniface Mwangi have been more open about their partisan leanings, which may make it easier for citizens to discount their calls for reform. Even former Chief Justice Willy Mutunga has advocated that civil society actors form a political party, a move which would further muddy the waters. Through these explicitly political dabblings, and by betting on Odinga in the August poll, the civil society sector may have inadvertently undermined its future relationship with the Ruto government.
Nevertheless, as president, Ruto can choose whether to see civil society as a continued opponent or not. At least publicly, he has not moved to restrict the sector in retaliation, and has called for civil society and media to work hand in hand with government to amplify the voices of Africa globally with regard to climate change. Yet after more than two months of the Kenya Kwanza government, it is not clear that the administration is going to heed its own calls.
If the new administration can put aside its election-related differences with prominent civil society actors and submit to accountability meted out by CSOs, Ruto will find an undeniably effective way to prove the anti-dynasty politics for which he campaigned. This may prove fruitful if he plans to seek re-election in 2027. It could also endear him to Western allies, who have historically encouraged democracy.
Activists such as John Githongo and Boniface Mwangi have been more open about their partisan leanings, which may make it easier for citizens to discount their calls for reform.
Indeed, abstaining from undermining civil society freedoms while also choosing to embrace criticism from CSOs could distinguish Ruto’s leadership internationally. The West is facing challenges with declining democratic credibility both at home and abroad. The US and UK spoke out in support of the ICC cases, yet took a “business as usual” approach to relations with the Uhuru/Ruto administration. Western leaders also praised the 2017 elections before they were annulled by the Kenyan Supreme Court. If Ruto shuns the temptation to ignore the warnings of civil society, his administration could be a model on the international stage that would needle at older democracies that may be leaning away from accountability.
On an even more practical note, re-opening space for civil society could help Ruto fulfil his vow to reinvigorate the Kenyan economy. The international humanitarian and development sector comprises a nontrivial part of the economy. There are not only UN agencies based in Nairobi, but also around 12,000 active NGOs countrywide, who employ an estimated quarter of a million people. The sector brought in KSh185 billion in donations in the 2019/2020 financial year.
Abstaining from undermining civil society freedoms while also choosing to embrace criticism from CSOs could distinguish Ruto’s leadership internationally.
Research shows that development sector organizations like international NGOs tend to locate in democratic countries more than in authoritarian ones. Thus a welcoming environment for civil society could help to retain Nairobi as a leader and an employment hub of the large Eastern Africa and Horn development sector.
Ruto must decide which legacy to leave for the history books. Ultimately, his administration, like those of his predecessors, may find itself unable to resist the temptation to frustrate and marginalize civil society actors who opposed his presidency. If that happens, we expect the sector to grow ever more nimble, adapting to restricted space just as it has in the past.
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.
Data Stories2 weeks ago
Are GMOs the Answer to Kenya’s Food Insecurity?
Politics2 weeks ago
Back to the Future: The Return of Recession, Debt and Structural Adjustment
Op-Eds2 weeks ago
Biting off More Than We Can Chew: US, GMOs and the New Scramble for Africa
Op-Eds1 week ago
America’s Failure in Africa
Politics2 weeks ago
The Mwea Irrigation Ecosystem as a Small-Scale Agriculture Model
Op-Eds7 days ago
The Perfect Tax: Land Value Taxation and the Housing Crisis in Kenya
Politics1 week ago
Mukami Kimathi and the Scramble to Own Mau Mau Memory
Podcasts2 weeks ago
Finance Bill 2023: A Prowling Economic Hitjob