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HIGHWAY ROBBERY AND SEX TOYS: Plunder by the numbers

Did the Jubilee government loot $20 billion during its first term? The equivalent of 10 Eurobond issuances, the money has disappeared from the government’s loan portfolio. Technically broke by its own admission, Treasury has blamed, unconvincingly, everything from devolution to the wage bill for the state of its finances. DAVID NDII delivers another damning indictment against the pirates of pillage.

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HIGHWAY ROBBERY AND SEX TOYS: Plunder by the numbers

Three weeks ago, Finance Cabinet Secretary Henry Rotich caused a stir when he reportedly declared the government broke. Rotich made the pronouncement in Parliament, when he gave notice that he would be presenting an austerity supplementary budget to plug a Ksh. 84 billion hole in the government’s finances. A day later, he retracted— with good reason. When Simeon Nyachae did so 20 years ago, he was promptly demoted to the Ministry of Industry. He declined the job and left government.

The pronouncement came hot on the heels of Mr. Rotich’s gallant return from the City of London waving a fistful of dollars, two billion of them, which he proclaimed a ringing endorsement of Jubilee’s economic stewardship, an emphatic vote of confidence in our economy by the global financial markets.

Three weeks ago, Finance Cabinet Secretary Henry Rotich caused a stir when he reportedly declared the government broke. Rotich made the pronouncement in Parliament, when he gave notice that he would be presenting an austerity supplementary budget to plug a Ksh. 84 billion hole in the government’s finances. A day later, he retracted— with good reason. When Simeon Nyachae did so 20 years ago, he was promptly demoted to the Ministry of Industry. He declined the job and left government.

Two questions arise. First, if you’ve just raised 10 percent of your budget in one fell swoop, you ought to be flush with cash. Second, economic growth as brisk as projected should swell the public coffers. And growth prospects ought to be strong. We know the Jubilee government has borrowed upwards of two trillion shillings in its first term, doubling our public debt in the process. This is a huge amount of money— about three times the GDP of Rwanda. The economic benefits of the SGR and the other infrastructure projects that this money has financed should be kicking in now. Jubilee’s economic math does not add up. Where has the money gone?

Let us start with where it has not gone.

It is not the wage bill. As this column has demonstrated on several occasions, all the wage bill hysteria is fake news. The wage bill has only increased 23 percent, well below the rate of revenue growth. In effect, wage outlays share of revenue has been falling. It is difficult to understand why government lies about the wage bill. It is even more difficult to understand how it expects to get away with it when its own reports tell the complete opposite such as demonstrated by the chart below, which appears in this year’s Budget Policy Statement.

Wages as a percentage of National Government Revenue

Wages as a percentage of National Government Revenue

It is not devolution either. Contrary to popular opinion, the establishment of counties did not entail expansion of government, or any new outlays. In fact, the number of elected representatives was reduced from more than 3,000 councillors to 1,450 county assembly members (MCAs). The money going to counties followed the functions. It should have been offset by reductions in national government budget on the same. In effect, devolution should be budget neutral.

The actual budget for (electricity) transmission and distribution is Ksh. 277 billion… Between half and two-thirds of the Ksh. 277 billion budget has been eaten.

In their first year of existence, the county governments’ revenue share came to Ksh. 193 billion but the deficit increased by only Ksh.66 billion. In the subsequent four years, county transfers have increased by 12 percent per year on average, while national government expenditure excluding county transfers has increased 16 percent per year, in other words, national government is gobbling money faster than the counties.

The wage bill and devolution are scapegoats.

In its four full financial years the Jubilee administration has posted capital budget to the tune of Ksh. 2.5 trillion. This is almost double the cumulative transfers to the counties over the same period (Ksh.1.3 trillion). Counties are mandated to invest a minimum of 30 percent on development but few manage to do so consistently. Cumulatively, capital spending in the counties is in the order of Ksh. 300 billion. Excluding the railway, the Jubilee administration has invested on average Ksh. 45 billion per county, while the county governments’ have spent an average of Ksh.6 billion. This means that on the ground, we should be seeing seven times as many, or bigger, national government development projects as county government ones. Where are they?

Between roads and power is a combined Ksh. 760 billion shillings which is still only a third of the Ksh. 2.1 trillion we need to account for. Where is the rest of it?

Roads are the obvious place to start. The Jubilee administration promised the mother of all road building programs. In 2013, they took over 1788 km of road under construction (new and major rehabilitations) from the grand coalition government, with a contract value of Ksh. 143 billion. By the end of 2016, the most recent published data available shows they had increased this tally to 1931 km with contract sum of Ksh. 221 billion. The data shows that 932 km of these roads worth Ksh. 95.8 billion were inherited, meaning that Jubilee had commissioned 1000 km of new roads for Ksh.126 billion. This is not earth shattering. In fact, of these only 315 km are new roads, the rest being rehabilitation and upgrading of existing roads.

But construction costs have gone up 44 percent, from Ksh. 80 million to Ksh. 115 million per kilometre. In 2014, crude oil prices plummeted from US$ 110 per barrel to an average of US$50 for the rest of the period. The cost of bitumen mirrors crude oil prices, and road construction also consumes copious amounts of diesel. Road construction costs ought to have fallen by at least 25 percent, which translates to Ksh. 55 million a kilometre. We are being fleeced at least Ksh. 55 million a kilometre of road build by Jubilee than we were being fleeced before.

The other big ticket infrastructure item is electricity, and one of the administration’s flagship ventures. Budget data shows a cumulative outlay of Ksh. 360 billion over the four years. These figures are questionable.

The electricity transmission operator Ketraco reports that it has completed 1800 km of transmission lines since it was set up in 2007. It has another 2400 km under construction. The construction cost of transmission lines are not published, but we can work around this. One of these lines, the Loiyangalani-Suswa transmission line has been in the news a lot for all the wrong reasons. The line is for evacuating power from the Turkana Wind Power project (which is actually in Marsabit county). The power project was completed in 2017, but the government failed to complete the transmission line in time meaning that we have to pay the investor over a billion shillings a month for power we are not consuming. This is part of the reason why electricity costs have spiked, but I digress.

I recently estimated the Uhuruto kleptocracy’s plunder at Ksh. 350 billion (US$3.5 billion) which ranked it fifth in the world kleptocracy league table, right behind Mobutu and Abacha in joint third (US$5 billion), Ferdinard Marcos in second (US$10 billion) all trailing Suharto at US$35 billion). It is beginning to look like a gross understatement.

The cost of the 428 km 400Kv transmission line is quoted as Euro 142 million (Ksh. 17.8 billion), which works out to Ksh 42 million a kilometre. The actual budget for transmission and distribution is Ksh. 277 billion. At Ksh 42 million a kilometre, this budget outlay is the equivalent of 6,600 kilometres of 400Kv transmission lines, 60 percent more than all the transmission lines built and under construction over the past decade. And most of the lines are not 400Kv lines. They are 220Kv and 132Kv, which cost considerably less. The reasonable cost of the 2800 kilometres of transmission lines under construction would be in the order of Ksh.100 billion. Between half and two-thirds of the Ksh. 277 billion budget has been eaten.

Policy and planning, and public financial management, whose only infrastructure is IFMIS, do not immediately strike one as capital-intensive undertakings. Investment in policy and planning has absorbed Ksh. 140 billion, an average of Ksh. 35 billion a year. Investment in public financial management has absorbed Ksh. 137 billion. Two functions that require no brick and mortar have consumed Ksh. 277 billion. SGR from Mombasa all the way to Konza? Computers and sex toys? There is something rotten in the state of Denmark.

The budget figures for roads are equally questionable. While, as we have already established, the actual road output is in the order of 1,800 kilometres costing Ksh. 220 billion, the budget documents reflect a capital outlay of Ksh. 400 billion. Last financial year alone, the budget was Ksh. 147 billion. At the Jubilee cost of Ksh.115 million per kilometre, this outlay works out to 3500 kilometres of road – 1,500 kilometres more than the projects underway at the end of 2006 as per latest published data. Could the Jubilee administration have commissioned 1500 kilometres of road in 2017? We are talking Mombasa-Nairobi three times, Lunga Lunga to Lokichoggio with 100 kilometres to spare. Admittedly, we did see Uhuru Kenyatta racing up and down the country commissioning things, but 1,500 kilometres is a stretch.

We are done with the big infrastructure things. Between roads and power is a combined Ksh. 760 billion shillings which is still only a third of the Ksh. 2.1 trillion we need to account for. Where is the rest of it?

Policy and planning, and public financial management, whose only infrastructure is IFMIS, do not immediately strike one as capital-intensive undertakings. Investment in policy and planning has absorbed Ksh140 billion, an average of Ksh. 35 billion a year. Investment in public financial management has absorbed 137 billion. Two functions that require no brick and mortar have consumed Ksh. 277 billion. SGR from Mombasa all the way to Konza? Computers and sex toys? There is something rotten in the state of Denmark.

As this column has demonstrated on several occasions, all the wage bill hysteria is fake news

Water and irrigation was funded to the tune of Ksh. 160 billion, but pray, why are we still ravaged by drought. Last year, we spent Ksh. 244 billion to import food, more than double the preceding five-year average of Ksh. 112 billion, and this year promises to be another bumper food import year. Thwake, the biggest dam ever comes with a price tag Ksh. 36 billion. It is not in these figures, but we’ve already been doing the equivalent of one every year. Youth and women have been empowered to the tune of Ksh. 60 billion. Youth and women enterprises should be thriving everywhere. And on and on it goes.

The puzzle of Jubilee’s economic math is no puzzle at all. Borrowed money has been plundered and squandered. It should not surprise. Kenya National Assurance, Kenya Meat Commission, KCB, National Bank, Kenya Airways, Uchumi, KCC, Mumias and countless others we have plundered state corporations, some several times over. It was only a matter of time before we plundered the Government itself.

I recently estimated the Uhuruto kleptocracy’s plunder at Ksh. 350 billion (US$3.5 billion) which ranked it fifth in the world kleptocracy league table, right behind Mobutu and Abacha in joint third (US$5 billion), Ferdinard Marcos in second (US$10 billion) all trailing Suharto at US$35 billion. It is beginning to look like a gross understatement.

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David Ndii

David Ndii is one of Kenya's leading economists and public intellectuals.

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KENYA BUDGET 2018/19: It’s time for a taxpayers boycott

The Kenya Budget 2018 has drastic implications on national and regional stability, on the Kenyan economy and on Kenyan workers. Its projections contradict data shared in previous Economic Surveys; it makes patently false claims, for instance, about the decline in domestic credit, to justify doling out billions to already well-provisioned sectors, notably manufacturing. But more than anything else, it is quite simply a perfect script for more waste and theft. By L. MUTHONI WANYEKI

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KENYA BUDGET 2018/19: It’s time for a taxpayers boycott

It’s time for a taxpayer’s boycott in order to evaluate what is increasingly sapped out of us through tax and against what’s disgorged out of us through the theft and waste of our money. Let’s compare the facts, according to the government’s own Economic Survey 2018 and this week’s budget speech.

This year’s budget aims are meant to align with, and support the Jubilants’ so-called ‘Big Four Agenda’ – boosting manufacturing activities, enhancing food and nutrition security, achieving universal health coverage and supporting the construction of at least 500,000 affordable houses by 2022. Bear in mind, however, that the first Jubilant administration, through its Economic Transformation Plan, also had a focus on agriculture and manufacturing.

Last year, the real added value of agriculture shrunk by 3.5 percent to 1.6 percent. This was blamed (as usual) on the lack of rainfall. True, there were shocking decreases in production of key crops – coffee’s production dipping by 11.5 percent and tea’s by 7 percent with only horticultural production going up. But there was an overall increase in the value of marketed production of Ksh.28.6 billion for the agricultural sector. So why did the real added value shrink? What happened?

There’s no doubt that Kenya’s efforts to expand social protection are worthwhile. Reforming social insurance, for instance. Or expanding social assistance to vulnerable groups. But social protection is about risk mitigation – preventing the already precarious from tipping over into even more precarious. Social protection is not about growing jobs, enabling livelihoods and improving returns from employment. It’s also not about ensuring that the intent to improve access to quality social services translates into actual access to social services.

The real added value of manufacturing shrunk by 1.9 percent to 0.2 percent. This was blamed (also as usual on the extended electoral process, high production costs and competition). Note that credit extended to manufacturing actually increased – by Ksh 36 billion, no less. Yet there were shocking decreases in the levels of key manufactured products – except for maize and soda (!). What happened?

Regardless of what happened last year, to fix these sectors now, our Treasury proposes the following:

For the agricultural sector (amongst the usual pleas to move away from rain-fed agriculture and so on), to put about 700,000 acres under large-scale production by public-private partnerships (PPPs). No mention is made of where these additional acres are to come from – when land theft, fragmentation and scarcity is the source of so much national tension already. Maybe the President’s family intends to return the immense tracts of public land the founding President appropriated for himself?

For the manufacturing sector, contradictions abound. On the one hand, Kenya’s speedy accession to the African Continental Free Trade Area is praised. On the other hand, regional (and other) competition is being dealt with by ‘re-negotiations’ and ‘reviews’ of the sub-regional trade arrangements we are already committed to. Plus the rather cavalier raising of customs duties on anything we’re deemed capable of producing – to no less than 35 percent (!) on everything from iron and steel to paper, plywood, textiles and vegetable oils. This, we are informed, should raise us an additional Ksh.27.5 billion (not to mention the ire of our neighbours in the sub-region). Free trade is only good when it’s good for us, apparently.

Moving on to the financial sector: the Treasury had much to tell us about the supposedly negative effects of the interest rate cap. It has, we were told, made banks ‘shy away’ from would-be borrowers, who have also pushed depositors towards an expanded range of non-interest earning deposit accounts. It has also, we were told, slowed growth in credit afforded to the private sector.

Yet the Economic Survey for 2017 told us otherwise. As mentioned above, credit to the manufacturing sector grew last year – by Ksh.36 billion. Credit to the construction sector also grew last year – by Ksh.5.1 billion. Overall, domestic credit increased by 7.9 percent in 2017 – including an increase of credit to the private sector by 2.4 percent. And, despite interest rates remaining fairly steady, deposit rates went up as well!

 Credit to the manufacturing sector grew last year – by Ksh.36 billion. Credit to the construction sector also grew last year – by Ksh.5.1 billion. Overall, domestic credit increased by 7.9 percent in 2017 – including an increase of credit to the private sector by 2.4 percent. And, despite interest rates remaining fairly steady, deposit rates went up as well!

But no…the Treasury has decided this experiment in making banks less usurious must end. It will be seeking to repeal the now infamous Section 33B of the Banking (Amendment) Act. For those worried about small borrowers, especially for small and medium-size enterprises, have no fear. The new, combined Biashara Fund is here (which’ll combine the three special funds for SMES owned by women and the youth).

And, just so we’re clear that Treasury isn’t, in fact, on the side of usury, it will be seeking to institute a ‘Robin Hood’ tax – charging a 0.05 percent tax on all bank transfers of Ksh.500,000 or more to go towards public health. Which we might be happy about if they came from banks and not us (as individuals and businesses). And if Treasury wasn’t also increasing the (already outrageous) tax on all mobile money transfers by two percent to 12 percent. What the good Lord gives with one hand he’ll certainly take away with the other.

Oh, and in case we missed it, instead of the progressive income tax increase on high-earners we had expected, now everybody gets a tax increase. The Employment Act is to be amended to impose a housing tax on all of us – an additional 0.5 percent will be taken from every formal sector worker, matched by an additional 0.5 percent from the employer virtuously to go towards housing.

Our spending target is to come in at just under Ksh.2.56 trillion. The aim apparently being to reduce our deficit from 7.2 percent to 5.7 percent while keeping our debt to gross domestic product ratio just below 50 percent. This spend target is slightly under our spend for 2017 – which sat, at the end of the day, at just under Ksh.2.78 trillion. Not controlled for theft and waste obviously

Our spending target is to come in at just under Ksh.2.56 trillion. The aim apparently being to reduce our deficit from 7.2 percent to 5.7 percent while keeping our debt to gross domestic product ratio just below 50 percent. This expenditure target is slightly under our spending for 2017 – which sat, at the end of the day, at just under Ksh.2.78 trillion. Not controlled for theft and waste, obviously.

With regard to theft and waste, the Treasury announced a bunch of moves to make public procurement more to scale and transparent, with significant allocations to all criminal justice institutions now involved in the ‘multi-agency’ effort against theft and waste. But it’s hard not to be cynical given the absolute lack of attention apparently paid to improving efficiencies and prudence.

There’s no doubt that Kenya’s efforts to expand social protection are worthwhile. Reforming social insurance, for instance. Or expanding social assistance to vulnerable groups. But social protection is about risk mitigation – preventing the already precarious from tipping over into even more precarity. Social protection is not about growing jobs, enabling livelihoods and improving returns from employment. It’s also not about ensuring that the intent to improve access to quality social services translates into actual access to social services.

That translation has been utterly undermined by the breadth, depth, prevalence of the theft and waste of public money that prevails. Treasury needs to convince us that it’s taking that theft and waste seriously. Sorry, the measures announced just don’t cut it.

It’s time for a taxpayers boycott. Really. There’s no taxpayer who is not absolutely and completely embittered by what we have to contribute. Because what we contribute is going to theft and waste.

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KENYATTA’S WAR ON CORRUPTION: Words won’t cut it, the budget is the corruption

Corruption in Kenya isn’t about greedy procurement officers, fiddling civil servants, crooked businessmen, shady bankers, thieving politicians. These are merely creatures of an inherently corrupt political system. The current crisis was triggered by the capture of the public finance management system by what we call ‘cartels’. Now broke and in debt from all the looting, Treasury has officially turned against the people. By JOHN GITHONGO.

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KENYATTA’S WAR ON CORRUPTION: Words won’t cut it, the budget is the corruption

The three key issues Kenyans are talking about today when they survey the political scene are corruption; ‘the handshake’ between Raila Odinga and Uhuru Kenyatta; and, the fate of Deputy President William Ruto as he prepares for a run at the presidency in 2022. For his part, Mr. Kenyatta came out of the handshake in March with a renewed push against the theft and plunder that has characterised his regime thus far. He has issued strong statements against corruption; announced that procurement officers would be asked to step aside and vetted before resuming their positions. Previously he’d even announced that lie detector machines would be introduced into the public service to promote integrity. Most recently, he pronounced public officials (starting with himself) would be subjected to lifestyle audits and that all major public procurements would see their details published in the media including the names of the companies winning the tenders complete with their beneficial owners. All strong stuff especially coming on the back of a series of breathless exposés in the mainstream press of the looting of a range of government bodies, the National Youth Service (NYS) merely being the most egregious and colourful. The scandals have exasperated Kenyans.

Oddly though, all the bold pronouncements are yet to capture the public imagination. Indeed, Kenyans seem sceptical about the President’s anti-corruption crusade. This is partly because he has historically been big on talk and small on action where this particular vice is concerned. Secondly, there is suspicion regarding its timing. Why do now what you were unwilling to do between 2013 and 2017? Thirdly, there is the rather scattershot character of the anti-corruption initiatives announced. This has led some to observe that a series of tactical moves are being employed without a coherent strategy. For example, it is self-defeating to attempt a serious anti-corruption campaign in a society as open as Kenya’s while alienating the media and civil society at the same time. Public opinion is mobilised by civil society, civic society (the churches, professions etc) and the media – not by politicians no matter how well-meaning.

This is partly because Kenyatta has historically been big on talk and small on action where this particular vice is concerned…There is suspicion regarding the timing of the latest war on corruption. Why do now what you were unwilling to do between 2013 and 2017?

The broad scepticism that has greeted Kenyatta’s efforts thus far was best articulated by one of the country’s most experienced progressive politicians, Senator Jim Orengo of Ugenya, speaking before the Senate on May 31st. He warned that the real corruption in Kenya was happening at the highest levels but we Kenyans were afraid to call it out. He essentially asked the president and other top leaders to look around themselves and they would find that the real rot sits in cabinet with them: “In the inner sanctum of power there are people sitting there who should not be sitting there.”

The truth of the matter is that 50 percent of the fight against corruption is related to perceptions. Despite extraordinary efforts to manage the media, the current campaign is yet to capture the public imagination. Until it does Mr. Kenyatta is rolling a stone uphill watched by a disbelieving population. As I said, part of the problem is that it’s clear he doesn’t have a coherent strategy, which makes even simple efforts all the more difficult. Secondly, Kenyatta and his colleagues are victims of an even more serious strategic misinterpretation.

Corruption in Kenya isn’t about greedy procurement officers, fiddling civil servants, crooked businessmen, shady bankers, thieving politicians. These are creatures found in all societies. The issue at hand in the Kenyan context is that these players are born of a system of politics and governance that is itself inherently corrupt; one in which the thieves and those who facilitate them thrive. Indeed, if one were looking at where the next scandals will come from one doesn’t need an army of technicians with polygraph machines. This week the Cabinet Secretary for Finance presented to parliament a Ksh.2.5 Trillion (US$25 billion) budget. The thieving in Kenya starts right here. It is built into the budget. When the budget of the NYS shot up from US$50 million to US$250 million in Jubilee’s last term it was clear that this wasn’t a measure of the NYS’s absorptive capacity or a vast upgrading of this programme but the creation of what was literally a slush fund created to be stolen. This ‘theft-ready’ budget is a product of our politics. Last week the Auditor General, Edward Ouko, told Reuters that corruption across all levels of government threatens the integrity and basic functioning of the state. He said that the corruption was ‘coordinated at a high level’.

This week the Cabinet Secretary for Finance presented to parliament a Ksh.2.5 Trillion (US$25 billion) budget. The thieving in Kenya starts right here. It is built into the budget. When the budget of the NYS shot up from US$50 million to US$250 million in Jubilee’s last term it was clear that this wasn’t a measure of the NYS’s absorptive capacity or a vast upgrading of this programme, but the creation of what was literally a slush fund created to be stolen. This ‘theft-ready’ budget is a product of our politics.

It is time to accept that Kenya’s corruption crisis may in part be caused by the deliberate collapsing of our public finance management system – chunks of it are owned by what have come to be known as ‘cartels’. When this happens the challenge you face is not chasing bribe-soliciting cops on the beat but fixing a situation where the budget itself is the corruption. There are generally three types of corruption: petty corruption that is often extortion by public officials for small considerations to overlook minor infractions or expedite the delivery of services already paid for in your taxes. Grand corruption that typically involves senior officials conspiring with private sector players to skim off public works projects of one kind or the other. There is a third type of ‘corruption’ that I call looting or economic delinquency on the part of the elite. In this type of thieving the pretence of a project to skim off is set aside as elites raid public coffers with impunity and pocket billions. This causes the kind of macroeconomic effects we are seeing in Kenya as our foreign debt soars on account of the looting of a small elite.

It is time to accept that Kenya’s corruption crisis may in part be caused by the deliberate collapsing of our public finance management system – chunks of it are owned by what have come to be known as ‘cartels’. When this happens the challenge you face is not chasing bribe-soliciting cops on the beat but fixing a situation where the budget itself is the corruption.

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In 1998 the fight against corruption, which had been a global advocacy campaign since the early 1990s by organisations like Transparency International, entered the mainstream of the global development agenda. There was no development programme in any developing country that didn’t have an anti-corruption aspect; that didn’t say something about transparency, accountability, basic freedoms etc. Even the World Bank whose legal department had previously blocked its officials from mentioning ‘corruption’ broke with tradition and joined the bandwagon. Previously corruption was described as project ‘leakages’ and ‘slippages’.

What had actually happened is that with the fall of the Berlin wall the opening up of political space meant that corruption, bribery and other forms of skulduggery that had been essential to governance during the Cold War found themselves being reported in newly free media, by a public free to associate and speak their minds. Between 1998 and 2008 a series of corruption scandals shook governments across the world. From Kenya to Germany, Peru, South Korea etc. In Latin America alone between 1998 and 2008, 11 governments fell due to corruption scandals that morphed into political crises of one sort or the other. By the start of this century anti-corruption researchers such as the respected Chilean economist Dani Kauffmann (now of the Natural Resource Governance Institute), argued to Moises Naim in Foreign Policy that with regard to the fight against corruption “Much was done, but not much was accomplished. What we are doing is not working.”

Indeed, corruption was increasingly blamed for all societal ills. More recently we’ve seen corruption scandals cause political shakeups in India, Mexico, Brazil, Bulgaria, Thailand, Guatemala, South Koreas etc. In Kenya we face a crisis in the health and education sectors; we are unable to create jobs for a majority of our youth. Unsurprisingly, corruption is the easiest to blame for what are sometimes failures caused by incompetence, a lack of capacity and the inability of the ruling elite to define the national interest separate from their own commercial interests.

Between 1998 and 2008 a series of corruption scandals shook governments across the world. From Kenya to Germany, Peru, South Korea etc. In Latin America alone between 1998 and 2008, 11 governments fell due to corruption scandals that morphed into political crises of one sort of the other. By the start of this century anti-corruption researchers…argued…that with regard to the fight against corruption: “Much was done, but not much was accomplished. What we are doing is not working”.

In Kenya, a serious effort to delineate personal interests from national ones would go a long way to dealing with our corruption problem. Conflict of interest was entrenched in our public service by the infamous Ndegwa Commission report of 1972 and we’ve been paying for it ever since. Most recently it is the poor who are paying most for it. The budget this week saw a cash-strapped regime under the gun of the IMF increase taxes on basic commodities in part to pay for the cynical profligacy of the elite since 2013. Ironically, Kenya’s constitution has created a legal infrastructure that should make the kind of economic delinquency and looting that’s in evidence impossible. But breathing life into a constitution requires political will that still seems to be lacking. In the meantime anti-corruption campaigns will be embarked on full of drama, gimmicks, speeches and technical fixes to problems that have much to do with the fact that our elites refuse to let governance institutions work, as they should. As a result, they are struggling to engineer the public sympathy and support essential to make the changes that need to happen.

Research by Juliet A. Attelah

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KENYA’S LOOMING RESOURCE CURSE: Dancing to Machiavelli’s drum

Fed a daily news diet of scandal and sensation, and the choreographed drama of minions arrested and driven off in sleek SUVs, the Kenyan public’s attention is daily diverted from the far more serious resource scams, planned and conducted by the men in the shadows. In Lamu and Turkana, the theft of billions of dollars is already underway. By MIRIAM ABRAHAM.

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KENYA’S LOOMING RESOURCE CURSE: Dancing to Machiavelli’s drum

The large hall was decorated with African art from the 54 Member States of the African Union. Singers and dancers from several African countries were entertaining dignitaries as they filled their plates with delicacies from the motherland. It was after all, Africa Day. The 25th day of May when we celebrate the formation of the Organization of African Unity (now African Union). And on the four screens around the large hall was the theme for this year: ‘Winning the Fight Against Corruption: A Sustainable Path to Africa’s Transformation.’

What a thematic choice by the African Union, I thought to myself. I was struck by the choice of words especially beginning with the positive: ’winning’. But my optimism was short-lived as the representative of Nigeria was called up to the podium to give remarks as the “champion” of the anti-corruption theme. I quickly looked up the latest Transparency International Corruption Perception Index to see the success of President Buhari’s fight against corruption, only to find that Nigeria had slipped from its 2016 ranking by 12 places to rank No. 148 out of 180 countries surveyed in 2017. Why, I wondered, didn’t the organisers select champions from countries that have seen significant improvement in their index score such as Côte d’Ivoire and Senegal or Botswana that has continuously ranked top in Africa. But then again: This Is Africa.

At this rate, I was expecting the Kenyan representative to be the next in line as the co-champion, standing at 143rd ranking on the Index! We were, fortunately, spared that particular embarrassment. As I listened to each speaker glorify African unity and deliberately evading the theme of the day, I could not stop thinking of the contradictions of our continent. We often have big aspirations that we parade but never implement – “winning the fight against corruption” being very high up on the list.

These empty aspirations were eloquently mimed by President Uhuru Kenyatta during his address to the nation on Madaraka Day.  Like most Kenyans, I remained unmoved by his speech. Have we not seen this circus before? Did we not vet officials in the Judiciary and the Police before? Any lessons? Is this not just another game in elite self-preservation?

To be fair though, as a country, we have not outdone Saudi Arabia’s anti-corruption charade. Yet. We recall how late last year under the supervision of Crown Prince Mohammed bin Salman, hundreds of billionaires including over 50 from his own royal family were detained at the luxurious Ritz Carlton hotel, a gilded prison if ever there was one. There were claims of torture and abuse. The detainees reportedly signed off their wealth to the tune of billions in exchange for their release. In the meantime, the same Crown Prince allegedly splurged $500m to buy a yacht and a chateau outside Paris for $300m. It has been billed as the world’s most expensive home.

The charade by the Saudis has the feel of Kenya, albeit on a different scale. On 28 May, we watched as tens of high ranking officials were rounded up and escorted to court in top-of-the-range vehicles on charges of stealing money from the National Youth Service programme. It was a well- choreographed show; we have seen it before. Like the Saudis, we are fighting corruption for Machiavellian reasons. We all know too well the politics of our country. We hold “elections”; the coalition that “loses” cries foul. In order to govern in a polarized environment, the winning faction of the elite agrees to share the loot and, in the process, ditch a few people to give room to the new entrants. Statecraft. It is what “the men from the shadows” as John Githongo calls them in his article, One Week in March: Was the Handshake Triggered by the IMF?, engineer with the nod of the international community, so called, to maintain the status quo. To paraphrase from one of Niccolò Machiavelli’s works, one should not attempt to win by force what can be won by deception.

On 28 May, we watched as tens of high ranking officials were rounded up and escorted to court in top-of-the-range vehicles on charges of stealing money from the National Youth Service programme. It was a well- choreographed show…We are fighting corruption for Machiavellian reasons. We know all too well the politics of our country. We hold “elections”; the coalition that “loses” cries foul. In order to govern in a polarized environment, the winning faction agrees to share the loot and, in the process, ditch a few people to give room to the new entrants. Statecraft. It is what “the men from the shadows”…engineer with the nod of the international community.

One can see this art of deception playing out with the white elephants of Lamu county.  Amu Power Company, a consortium that includes the Chris Kirubi-affiliated Centum Investments, has been awarded the tender to build the Lamu Coal Power Plant. In addition to the grave environmental concerns raised by community activists in Lamu, the approved Ksh 200 billion (US$ 2 billion) project does not make financial sense.

In a detailed analysis by Tony Watima in the Business Daily, the project’s high fixed cost of Ksh 36.2 billion per year is raised by its capital-intensive nature. While this would have made sense if the project was meeting real demand, it turns out that the additional demand is fictitious, a product of the Jubilee government’s fantastical ambitions. While real demand will stand at 2,500 Mw by 2022, Jubilee set itself a target of securing installed capacity at 5,000 Mw. Between reality and fantasy lies the opportunity for mischief. Thus, in the case of the Amu project, Kenyans will be paying almost solely for idle capacity. It will mean that each consumer will see an increase in their bill by Ksh 600 every month that would go directly to the Amu investors.

Amu Power Company, a consortium that includes the Chris Kirubi-affiliated Centum Investments, has been awarded the tender to build the Lamu Coal Power Plant. In addition to the grave environmental concerns raised by community activists in Lamu, the approved Ksh 200 billion (US$ 2 billion) project does not make financial sense…Kenyans will be paying almost solely for idle capacity. It will mean that each consumer will see an increase in their bill by Ksh 600 every month that would go directly to the Amu investors.

Amu is billed as the most expensive fixed cost project among the power generators. An additional 1,000 Mw of power that is excess of demand – and therefore idle capacity. In other words, we are incurring US$ 2 billion in debt to finance a white elephant. These costs do not include the potential loss of income from the fishing activities of the local community, and tourism. They also do not include the known health impacts from coal burning, the most toxic and dangerous pollutant of all fossil fuels.

If the government is serious about “winning the fight against corruption” as this year’s African Union theme pledges, then it must begin by being transparent about the Lamu Coal Power Plant. It must also be transparent about how it handles the export of crude oil from Turkana, lest we quickly join the millions of Africans for whom oil and minerals only yield the proverbial resource curse.

It must also address the systemic manifestations of corruption that begin from the budget preparation process. As a former senior official in a state institution, I witnessed first-hand how numbers are padded to inflate the actual requirements for any project. Requisitions of products that were in abundance in warehouses were made. Goods not needed at all were included in the budget. Consultancy fees, costs for transportation of goods and official travel were common lines that were padded with excess fat that would be “chopped” by officials, as my Nigerian friends would say.

The best lie detectors – probably also procured through corrupt means – cannot replace the dramatic shift in culture that is required in the genuine fight against corruption. Respect for professionalism, integrity, transparency and the rule of law are the fundamental cornerstones of a “corrupt free” Kenya. These are the same principles that this government, at its highest level, has frequently and gleefully violated. Targeting mid-level officials without touching the top-ranking thieves will only be scratching the surface. It will be classic Machiavellism. Or what Muthoni Wanyeki in her recent article eloquently called a ‘game of smoke and mirrors’.

The best lie detectors – probably also procured through corrupt means – cannot replace the dramatic shift in culture that is required in the genuine fight against corruption. Respect for professionalism, integrity, transparency and the rule of law are the fundamental cornerstones of a “corrupt free” Kenya. These are the same principles that this government, at its highest level, has frequently and gleefully violated.

If we as the tax payers fall for the deception, we will be cheering the smokescreen magicians. We will find ourselves questioning the #STOPTheseTHIEVES protesters, wonder why they are disrupting the supplications made at the recent Prayer Breakfast. And in a few weeks, just like we have done with the theft and electoral injustice at the IEBC, we will forget these scandals. Well, until the proceeds from the crude oil imports and the siphoning of money through the Lamu coal plant reach peak levels and “the men from the shadows”, the real rulers of the country, deliver baits on another NYS scandal that the media will gullibly headline, as the looting continues elsewhere and the elite entrench their political and financial positions.

As our African-American brethren say: Stay Woke!

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