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A QUESTION OF POWER: Why Ethiopia’s economic transformation is a cautionary African tale

The arrival of reformist Prime Minister, Abiy Ahmed Ali, may have only given the ruling EPRDF a stay of execution. At the heart of the political crisis is an old problem: a command economy reluctant to liberalise. State-led infrastructure expansion fuelled a decade of miraculous growth, producing five times more electricity than the country requires. The returns on this investment are not forthcoming. Exports are falling, the Birr has been devalued; a severe forex shortage is underway. Is Ethiopia’s future as Africa’s premier power exporter viable? By DAVID NDII.

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A QUESTION OF POWER: Why Ethiopia’s economic transformation is a cautionary African tale
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Something is stirring in Ethiopia. It began with the abrupt resignation of former Prime Minister Hailemariam Desalegn on February 15. After weeks of backroom dealmaking the EPRDF coalition which has governed Ethiopia with an iron fist since ousting the Derg, Mengistu Haire Mariam’s Marxist dictatorship in 1991, elevated youthful Abiy Ahmed Ali as prime minister. The new prime minister hit the ground running with a raft of political reforms.

Three years ago, students in the town of Ambo started a protest to oppose a metropolitan development plan that would have incorporated their town and seven others into the capital, Addis Ababa. Ambo is 120 kilometres west of Addis in the Oromia region. They accused the federal government of a top-down land grab that would deprive them of livelihoods and destabilize their communities and culture.

After the overthrow of the Derg, Ethiopia adopted an ethno-federalist constitution that even provides for orderly secession. But the EPRDF has sought to run a command-and-control developmental state. The Addis Ababa expansion plan was a head-on-collision between the two—the constitution’s federalist ethno-regional political bargain and the centralizing ideology and power politics of the EPDRF. While the EPRDF is a consociational coalition, it’s the late strongman Meles Zenawi’s Tigrayan People’s Liberation Front (TPLF), which led the liberation war, that wields most of the power in the coalition (and gets most of the spoils). The Tigrayans are a relatively small tribe (six percent of the population) from the north of the country.

The Addis expansion plan, which affected the Oromo and Amhara regions, ignited discontent whose depth the EPDRF clearly underestimated. The Oromo are the largest ethnic group in Ethiopia, accounting for a third of Ethiopia’s 100 million-strong population, with strong grievances of historic marginalization. The Amhara, who constitute just over a quarter of the population, are the erstwhile politically dominant ethnic group. Both Emperor Haile Selassie and Mengistu were Amhara (his father, originally Oromo, was adopted by an Amhara nobleman). Repression, including massacres, mass incarcerations and a state of emergency, a feature of both Emperor Selassie’s late rule and Mengistu’s Red Terror, returned under a beleaguered EPRDF.

Though unexpected, Desalegn’s resignation was preceded by a softening of the regime, including the release of political prisoners, which Desalegn said was meant to “foster national reconciliation”. The new prime minister is Oromo. His elevation was no doubt intended as an olive branch to the restive region.

The Addis Expansion Plan, which affected the Oromo and Amhara regions, ignited discontent whose depth the EPDRF had clearly underestimated…Repression, including massacres, mass incarcerations and a state of emergency, a feature of both Emperor Selassie’s late rule and Mengistu’s Red Terror, returned under a beleaguered EPRDF.

Hot on the heels of the tectonic shift in the politics have come equally momentous economic pronouncements. State owned Ethiopian Airlines and telecommunications and power utilities and other state corporations are to be partially privatized.

What exactly is cooking in Addis?

In his pronouncement speech, the Prime Minister Abiy spoke of a hard currency crisis. He is quoted in the media castigating his audience, Ethiopian businesspeople, for keeping their hard currency in Dubai and China and asking for their cooperation to resolve the crisis while also threatening unspecified actions on the hoarders of foreign exchange. Instructively, he also disclosed that the political crisis has dented diaspora remittances. Diaspora remittances are Ethiopia’s single largest source of foreign exchange, bringing in US$ 5.5 billion last year, almost double the country’s US$ 3 billion dollar export earnings.

The foreign exchange crisis is not new. In October last year, Ethiopia devalued the currency by 15 percent. While the recent government data shows foreign currency reserves equivalent to 2.3 months import requirements in December 2017, precarious but not dire (3-4 months requirements is the norm), some analysts say the reserves could have fallen below one month’s requirement, which is dire. Last week, the government announced that it had secured a US$1 billion foreign currency lifeline from the United Arab Emirates (UAE), part of a US$3billion aid and investment package. The UAE deal looks like a quid pro quo for Prime Minister Abiy’s de-escalation of tensions with Egypt over Ethiopia’s damming of the Blue Nile. The UAE is a strong ally of Egypt. This sequence of events begins to suggest that the foreign currency crunch is behind the softening of the EPDRF regime.

Prime Minister Abiy spoke of a hard currency crisis. [He castigated] his audience, Ethiopian businesspeople, for keeping their hard currency in Dubai and China and asked for their cooperation to resolve the crisis while also threatening unspecified actions on the hoarders of foreign exchange. Instructively, he also disclosed that the political crisis has dented diaspora remittances. Diaspora remittances are Ethiopia’s single largest source of foreign exchange, bringing in US$ 5.5 billion last year, almost double the country’s US$ 3 billion dollar export earnings.

Ethiopia has run into an old, mostly forgotten, economic development problem: the foreign exchange constraint. In the old days, it was caused by import substitution industrialisation. Import substitution industrialisation, the dominant development strategy for many sub-Saharan African states until the mid-seventies, entailed setting up industries to produce finished goods the country was importing, and protecting them from import competition with trade barriers, import and foreign exchange controls.

The new import substituting industries imported virtually everything from machinery, intermediate inputs, spare parts, technology and even management. The import substituting industry’s foreign exchange requirements ended up exceeding what the country was using to import the finished goods. Most of the import substitution industrializers relied on a few primary commodity exports. They soon found that their export earnings were insufficient to finance the industries.

Foreign exchange became scarce, and self-reinforcing. To circumvent foreign exchange rationing, businesses would hoard foreign exchange abroad through transfer pricing (over-invoicing imports and under-invoicing exports), compounding the primary motive for transfer pricing— tax evasion. One such scheme came to light not too long ago during the unravelling of the Nairobi Securities Exchange-listed corporate icon, CMC, which has since been delisted. It was revealed that the company had maintained a secret account in Jersey to which proceeds of over-invoicing were deposited and paid to its directors offshore. Remarkably, many of the beneficiaries of the scheme were the same bureaucrats who were responsible for enforcing foreign exchange controls.

The 1973 oil-shock and declining primary commodity prices in the ‘70s compounded the external imbalance that import substitution industrialization started. By the early ‘80s, most import substituting countries were on their knees. In some, Tanzania for example, manufacturing ground to a halt.

Ethiopia’s external imbalance and attendant foreign exchange crises emanate from over-investment in infrastructure. Ethiopia adopted an infrastructure-led growth strategy known as the Growth and Transformation Plan (GTP) in 2010. It has since doubled electricity generation from 1800 to 4200 MW, against peak power requirement of 2000 MW. There is close to 7,000MW of new power projects under construction. The Ethiopia Grand Renaissance dam alone has a capacity of 6450 MW. When these are completed, Ethiopia’s generation capacity will be more than four times domestic demand. The road network has been expanded two-and-a-half fold, from 44 km to 110 km of road per 1000 square kilometres. And there is of course the 670-km Addis-Djibouti railway, and a light rail system for Addis Ababa, operational since late 2015 .

The infrastructure building boom, described in a recent World Bank report as “one of the highest rates of public investment in the world”, turbocharged Ethiopia’s economic growth rate from a respectable 5-6 percent to an exceptional 10 percent per year. But close to a decade on, the anticipated private investment that would enable Ethiopia to pay for it has not materialised. Ethiopia was banking on export processing zones investment, and has built several industrial parks around the country.

Besides failing to attract investment, building booms of this magnitude have the effect of shifting incentives against “tradable” sectors of the economy. This phenomenon is more commonly associated with natural resource booms that economists call Dutch Disease. This is reflected in the decline of Ethiopia’s export to GDP ratio, from 17 percent to eight percent of GDP compared to Sub-Saharan average of 27 percent. Its export to GDP ratio is now the second lowest on the sub-continent after Burundi (6.2%).

Ethiopia has compounded its infrastructure-driven external imbalance with classic import substitution—a massive state-drivend sugar industry expansion. The state-owned Ethiopia Sugar Corporation is currently developing ten large-scale sugar projects that will put a million acres of land under sugarcane production. A capital intensive, low value product with distorted markets and a permanent global glut floating in the high seas, sugar is as bad as import substitution industries get. Yet there is no shortage of export-oriented agriculture investments Ethiopia could have chosen. Oilseeds are Ethiopia’s second largest export earner after coffee. It has a promising livestock and leather apparel industry. Maize even.

The Bretton Woods institutions spent the ‘80s and ‘90s preaching the free market economic orthodoxy known as the Washington Consensus. Ethiopia has done the complete opposite. But the World Bank has been nothing but effusive. In a 2016 report, Ethiopia’s Great Run: The Growth Acceleration and How to Pace it, the World Bank asserts confidently that Ethiopia was on course to become a middle income country by 2025. Astoundingly the World Bank goes ahead to give a thumbs up to the policy regime that its structural adjustment programmes (SAPs) dismantled:

“Heterodox financing arrangements supported one of the highest public investment rates in the world. Three less conventional mechanisms stand out: first, a model of financial repression that kept interest rates low and directed the bulk of credit towards public infrastructure. Second, an overvalued exchange rate that cheapened public capital imports. Third, monetary expansion, including direct Central Bank budget financing, which earned the government seignorage revenues.”

Ethiopia has compounded its infrastructure-driven external imbalance with classic import substitution—a massive state-driven sugar industry expansion. The state-owned Ethiopia Sugar Corporation is currently developing ten large-scale sugar projects that will put a million acres of land under sugarcane production. A capital intensive, low value product with distorted markets and a permanent global glut floating in the high seas, sugar is as bad as import substitution industries get.

Heterodox means unorthodox or unconventional. In plain English, it means distorting credit markets, overvaluing the currency and printing money.

 After all the cheerleading, the Bretton Woods sisters now find themselves in an awkward situation. In its most recent debt sustainability report, the IMF acknowledges that Ethiopia is now staring at a debt crisis. It has no advice to give. Ethiopia’s hopes, it writes, now rest on exporting electricity. The IMF posits that Ethiopia has the potential to earn US$ 1 billion a year from selling electricity.

In reality, Ethiopia is selling a little power to Sudan and Djibouti, and has signed power purchase agreements with Kenya and Tanzania. But these countries are ramping up their own generation capacity. Kenya’s installed capacity is presently 35 percent above peak generation requirements excluding the 340 MW Turkana wind power which is awaiting completion of a transmission line, 55 percent when it is included. There are several other projects underway, and Kenya’s government seems dead set on proceeding with a controversial 1000MW coal plant in Lamu. Ditto Tanzania.

After all the cheerleading, the Bretton Woods sisters now find themselves in an awkward situation. In its most recent debt sustainability report, the IMF acknowledges that Ethiopia is now staring at a debt crisis. It has no advice to give. Ethiopia’s hopes, it writes, now rest on exporting electricity. The IMF posits that Ethiopia has the potential to earn US$ 1 billion a year from selling electricity.

Ethiopia’s biggest electricity customer potentially is Egypt. This may begin to explain the reason for the olive branch. Prime Minister Abiy also made a quick visit to Somalia last week. He might be hoping to sell some electricity there. To flog a billion dollars worth of power, Ethiopia will need to make peace with all her neighbours, and then some. If truth be told, the electricity export bonanza is a fig leaf.

There is a cold reality that the Ethiopian government seems to be still in denial about. Its heterodox macroeconomic regime is now untenable Investors do not like putting their money in places where it is difficult to get out. And now that people know how precarious the situation is, hard currency hoarding and capital flight will get worse, not better.

The competing destinations for the export processing investment that Ethiopia is building industrial parks for do not have exchange controls. And Ethiopia has many disadvantages to overcome, not least, being landlocked, not to mention its byzantine bureaucracy and anti-capitalist instinct. Financial liberalisation is inevitable, a matter of when and how, not if. The Prime Minister talked of the foreign exchange problem being a long term problem. He is dead wrong. He has eighteen months—best case scenario. His options boil down to whether to do big bang or gradual – rather like choosing whether to do your root canals all at once or every other week.

The announced fire sale of family silver will not do it either. Deregulation should precede privatisation otherwise it substitutes public monopolies for private ones. In the case of the telecom monopoly in particular, deregulation will kill a whole flock of birds with one stone—bring in hard currency from license fees, investment, access (at 40% Ethiopia’s mobile penetration is the lowest in the region) and quality of services. The sugar factories I would sell right away on an “as-is-where-is” basis. A stitch in time saves nine.

Ethiopia is by no means the only country floundering on infrastructure-led growth. It is a foolish idea. Monuments, delusions of grandeur, cargo cults—this columnist has all but run out of metaphors. Last year, Zambia’s President called a national day of prayer for the Kwacha. Last week he suspended borrowing and instituted an austerity programme that includes freezing projects that are less than 80 percent complete. Kenya is surviving on speculative capital inflows and juggling debt as it negotiates an IMF bailout.

Ethiopia’s unravelling is a reflection of its macroeconomic policy regime. When demand and supply don’t balance, something must give. In a liberal regime it is prices that adjust (exchange rate, interest, and inflation). If prices are controlled then demand or supply must give, in this case, the supply of foreign exchange. Still, the crisis has provided an opportunity for transformational political and economic change. To quote economist Paul Romer, a crisis is a terrible thing to waste.

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David Ndii

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

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Saving Lamu: How a Campaign for Environmental Justice Was Fought

The campaign against a coal-fired plant in Lamu is a good example of how a small, voiceless community can be mobilised to fight powerful and influential forces intent on destroying the environment. RASNA WARAH explores key aspects of the campaign and the landmark ruling that has inspired environmentalists and social justice advocates worldwide.

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In a country where justice is often denied, delayed or distorted, the landmark ruling of the National Environment Tribunal (NET) to cancel the licence for a proposed electricity-generating coal-fired plant in Lamu has restored many Kenyans’ faith in state institutions. The significance of the ruling, which was a victory for environmental justice advocates at home and abroad, cannot be underestimated (though going by the local media coverage of the judgement, it might appear that nothing remarkable has happened).

For the people of Lamu, who will be the most negatively affected if the plant is built, the decision was nothing short of a miracle, especially given that this is a country where major infrastructure projects are often carried out at the expense of local communities and the environment – and where such projects often involve kickbacks and corruption at the highest levels of government. Ochiel Dudley, a lawyer with Katiba Institute, which litigated the precedent-setting case, said that the ruling was a major victory for the people of Lamu and Kenya. “It has stamped the authority of tribunals in courts to ensure compliance with the rule of law,” he stated shortly after the ruling on 26 June.

In a country where justice is often denied, delayed or distorted, the landmark ruling of the National Environment Tribunal (NET) to cancel the licence for a proposed electricity-generating coal-fired plant in Lamu has restored many Kenyans’ faith in state institutions

NET was established under Section 125 of the Environment Management and Coordination Act (1999). Its mandate is to hear disputes arising from decisions of the National Environment Management Authority (NEMA) on the issuance, denial or revocation of licences. In its 26 June 2019 judgement, NET ordered Amu Power, the key player in the proposed Lamu project, to halt construction of the plant and to undertake a fresh environmental and social impact assessment (ESIA) for the project. It noted that the ESIA carried out for Amu Power by a company called Kurrent Technologies was flawed in one key aspect: it did not involve public participation, a constitutional requirement that NET chairman Mohamed Balala described as “the oxygen that gives life to an ESIA report”. In its ruling, NET stated that the lack of public participation was “contemptuous of the people of Lamu”.

Other important points in the ruling included the project’s lack of a strategic environmental assessment and insufficient and unclear plans for toxic coal ash handling and storage, as well as the project’s failure to take into consideration Kenya’s Climate Change Act.

The wrong choice for Kenya

There were many environmental, social and health concerns raised by those against the construction of the coal-fired plant. Environmentalists pointed out that the burning of coal releases toxic particles into the air that can cause asthma, bronchitis, cardiovascular disease and cancer. These particles can also affect fish, crops and wildlife.

In addition, burning coal requires millions of gallons of water to keep the plant cool. Releasing this water into the ocean around Lamu would increase the temperature of the water and kill the fish and other marine life. It would also impact the livelihoods of fishermen in the area.

There are also cultural concerns. Lamu Town has been designated a World Heritage site by the United Nations, which means that the Kenyan government is obligated to protect and preserve it. The proposed plant’s location on 865 acres of land in Kwasasi, just 20 kilometres from this historical town, is especially worrisome. Lamu Town is world-renowned for being one of oldest settlements along the East African coast, and is a much-loved tourist destination. Its pristine beaches have attracted the rich and famous and its Swahili culture has been the subject of countless studies. The toxic particles emitted from the plant could corrode the centuries-old buildings in the town and increase air pollution levels, which will make this unique island town an unhealthy environment for the residents and a less attractive destination for tourists.

The government insists that the economic benefits of the plant outweigh any environmental concerns. It says that the plant will bring much-needed development to the area. Critics argue that if the national and county governments were really keen on improving the living standards of the people of Lamu, they might have built more essential infrastructure, such as sewerage and sanitation systems, which are woefully inadequate, or a first-class hospital, which is much needed in this neglected part of the country.

Proponents of the project say that the plant will significantly reduce the cost of electricity. Those advocating against the plant disagree. They say that the 1,050-megawatt plant will actually cause the price of electricity to increase because the price of electricity will be directly related to the price of coal, which fluctuates. Moreover, the cost of building transmission lines to get the electricity to people in Nairobi and elsewhere and a train to get coal from Kitui will increase the cost of the electricity generated. And if the original intention was to export surplus electricity generated in Kenya to neighbouring countries, that plan is no longer viable: Ethiopia is currently quadrupling its energy-generating capacity and Tanzania is doubling it.

There were many environmental, social and health concerns raised by those against the construction of the coal-fired plant. Environmentalists pointed out that the burning of coal releases toxic particles into the air that can cause asthma, bronchitis, cardiovascular disease and cancer. These particles can also affect fish, crops and wildlife.

David Schlissel from the Institute for Energy Economics and Financial Analysis (IEEFA), in an assessment he conducted on the project, says that the Lamu coal plant is “the wrong choice for Kenya” for several reasons. First, Amu Power, the single-purpose joint venture between Gulf Energy and Centum Investment, calculated the price of electricity on the following erroneous assumptions: i) that coal would cost $50 per metric tonne (in 2017 the price of coal was $85 per tonne); ii) that Kenya’s demand for electricity would go up by 13 per cent annually (demand has actually grown by only 6 per cent a year, partly due to the slowing down of the economy); iii) that the plant would be utilised at 85 per cent capacity (if built, the plant will be grossly underutilised, running at a capacity of between 5 and 34 per cent and producing far less electricity than Amu claims it wil); and iv) that electricity would cost $0.072 per kilowatt hour (IEEFA calculated that electricity from the plant would cost three to ten times as much, from between $0.22 and $0.75 per kilowatt hour).

The most shocking part of the deal is that Kenyans will have to pay about $360 million per year in capacity charges (that’s over $1 million per day!) whether or not the plant generates any electricity and even if it is not operational. This makes one wonder how the government entered into the deal with Amu Power and whether any legal advice was sought before the agreement was signed. It also raises the question of whether people in government knew about the non-viability of the project beforehand but proceeded to go ahead with the project because there was $1 million to be made per day without any sweat or investment.

How this project was allowed in a world where countries including China (the biggest emitter of greenhouse gases and whose citizens are paying for this with their health) are weaning themselves away from coal is also disturbing, given that in 2018 President Uhuru Kenyatta pledged to move Kenya to 100 per cent renewable energy by 2020. But then in Kenya, it is not reason, common sense or environmental and social justice considerations that determine public policy but individual greed, myopic self-interest and lack of a long-term vision for the country and its future.

How it all started

In September 2013, five months after Uhuru Kenyatta was sworn in as president, the Kenyan government invited bids for the Lamu coal-fired plant. Twenty-six submissions were received. Gulf Energy was awarded the tender.

Amu Power, which did not even exist as an entity when the invitation for the bids went out, was only established after Gulf Energy, the developer and co-sponsor of the plant, started a joint venture with Centum, a Kenyan-owned investment company whose major shareholder is the Kenyan magnate Chris Kirubi and whose CEO is James Mworia. (Though there is suspicion that Amu Power is a front for powerful or influential people who wish to remain unknown.) The main potential funder of this $2 billion project is the Industrial and Commercial Bank of China. The African Development Bank initially showed interest in partially funding the project but pulled out after campaigners opposed the project. The Bank’s president stated that it was the lending institution’s policy not to fund coal projects.

The campaign against the project started in earnest in October 2016 when two civil society organisations – Save Lamu and Natural Justice – lodged an objection with the Energy Regulatory Commission (ERC) to Amu Power’s application for a coal plant in Lamu. This was the beginning of a successful campaign that culminated in the NET ruling last month.

So how did the people and organisations who campaigned against the construction of the coal-fired plant in Lamu succeed in their efforts? Well, two things stand out which other environmental campaigners might want to take note of as they provide a good case study on how to obtain environmental justice in the face of stiff opposition from government and corporate interests.

One, the campaign was fought not just by the affected communities in Lamu but by a coalition of local and foreign environmental and human rights organisations, namely, Save Lamu, Heinrich-Böll-Stiftung, 350 Africa, Centre for Human Rights and Civic Education, Sauti Ya Wanjiku, Muhuri – Muslims for Human Rights, National Resources Alliance of Kenya, American Jewish World Service and the Center for Justice Governance and Environmental Action. This coalition provided the campaign with the legal and financial resources and the moral strength and support that would not have been available if the campaign had been led only by members of the affected community in Lamu – though it is important to note that the residents of Lamu were both vocal and visible throughout the campaign.

Two, these organisations and their supporters designed a highly successful media campaign under the banner deCOALonize.org, which published regular updates online and on social media and organised street demonstrations both in Lamu and in Nairobi. By the time the case went to NET, opposition was so strong that a ruling in support of the plant in Lamu would have appeared to be totally misguided, or worse, highly compromised. Public pressure was thus key to the success of the campaign.

Organisers of the campaign say that the battle is not yet over. A spokesperson for the campaign said that while last month’s NET ruling will delay the Lamu coal project, there is no guarantee that the project will be halted indefinitely. “Amu Power can conduct a fresh environmental and social impact assessment and apply for a new licence, or can choose to appeal the decision, seeking to overturn the ruling and have the licence restored,” he said.

Amu Power has until 26 July to file a notice of appeal. However, the deCOALonize campaigners believe that Amu is not likely to appeal the ruling because it wouldn’t want to stall the project any longer with a court case it might very well lose. They believe that Amu will most probably go for a fresh ESIA that will deal with the issues raised by the tribunal. If a licence to build the plant is then granted, the struggle to save Lamu will continue.

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Limuru III: SabaSaba@29 – A Call to Action

Our elites should never be politically underestimated as they have a genius for lies, distractions, diversions, and divisions. They have mastered the art of manipulating the divisions of class, clan, gender, generation, religion, region, occupation, race, and, recently, even the English Premier League. Politics of division must be replaced by politics of humanity, national unity, and inclusion. Above all, we must breathe life into our constitution and our vision of how our politics is to be organised.

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Limuru III: SabaSaba@29 - A Call to Action
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Those of you who read Mutemi wa Kiama’s The Real Lords of Kenyan Poverty in his articulate response to the Deputy President will have captured this truth: our burning political issue is our ruling class/elites, the root cause of poverty, corruption, theft of national resources, inequalities and odious debts. They are the authors of our divisions and our strife, and the agents of foreign interests in our motherland. Yes, this class must be replaced by its antithesis, an alternative patriotic political leadership. Governor Kibutha Kibwana has advised us thus: “The social reform movement needs to reimagine itself from the grassroots.” This is also advice for the alternative political leadership that is anchored to such a movement. The communities at the grassroots must organise themselves and we must facilitate such organisations on the basis that we also are educated by communities.

The ruling class is racketeering, unpatriotic, kleptocratic, and is also the running dogs of the imperialism of the West and the East. This class has been called wala watu, walalahai, ogas, mazimwi, mapebari, mashetani. In Kiikamba we call this class asumbi kitundumo, and the Kalenjin call them chemosi. The Kikuyu call this class uthamaki. David Ndii refers to them as “some animals [who] are more equal than others.” Alamin Kimathi has called them mabwenyenye. Each community in Kenya should have a name for this class. They hate us, the people they lead and mislead. They wish us dead when they do not kill us. How do you explain the illicit economy in our midst (counterfeits, wildlife crimes, human trafficking, trafficking in body parts, drug trafficking, piracy, terrorism, money laundering) that makes us sick and kills us? Even the so-called licit economy is mired in illegal financial flows by multinationals; exploitation, domination, and oppression by foreign interests enslaves our people.

The communities at the grassroots must organise themselves and we must facilitate such organisations on the basis that we also are educated by communities.

Which idiot said the British had left? Or the Europeans? Or the Americans? And now the Chinese are here. With a multi-racial, multi-ethnic elite owning most of the land and other national resources, do we own our motherland? With the skyrocketing national debt, is it not a matter of time before our patriotic youth do what the Mau Mau Land and Freedom Army did in the 1940s and 1950s; organise and fight to free our motherland from foreign occupiers and their national agents?

A recent Oxfam Report states that, in a population estimated at 51 million, 8,300 Kenyan billionaires and multi-millionaires own assets equal to those of the rest of us. This inequality can only be explained by the elites’ politics of division for the last 56 years. Our elites should never be politically underestimated as they have a genius for lies, distractions, diversions, and divisions. They have mastered the art of manipulating the divisions of class, clan, gender, generation, religion, region, occupation, race, and, recently, even the English Premier League. Politics of division must be replaced by politics of humanity, national unity, and inclusion. Above all, we must breathe life into our constitution and our vision of how our politics is to be organised.

The ruling class is racketeering, unpatriotic, kleptocratic, and is also the running dogs of the imperialism of the West and the East. This class has been called wala watu, walalahai, ogas, mazimwi, mapebari, mashetani. In Kiikamba we call this class asumbi kitundumo, and the Kalenjin call them chemosi. The Kikuyu call this class uthamaki. David Ndii refers to them as “some animals [who] are more equal than others.” Alamin Kimathi has called them mabwenyenye. Each community in Kenya should have a name for this class.

The long march to an alternative political leadership started with Me Kitilili and was joined by other patriots, leading to the Mau Mau war of independence. The march has never stopped; it may occasionally retreat but like the mole that keeps on digging underground, periodic progressive eruptions of this march have marked the course of our history. So, today we meet on this site, a site that has been part of this long march to freedom, emancipation, and the reclaiming of our land and national resources. Limuru is the home of the 2010 constitution. It is to this constitutional shrine that we return to assert its validity, condemn its betrayal, and organise for its protection and robust implementation. The constitution is an excellent framework for getting Kenya out of its governance and developmental mess. It only requires agency, an alternative political leadership and the support of all Kenyans.

Limuru has witnessed previous alliances between civil society and opposition political parties. These parties were not an authentic opposition in the country but part of the intra-elite struggles for political power. The NCEC [National Convention Executive Council] learned its lesson from the IPPG [Inter-Parties Parliamentary Group]. We cannot continue to view these baronial and elite factions as providing a political alternative. There is none among them that is the lesser evil. We are in Limuru to end opportunistic political strategies with the ruling elite that have been devoid of a proper class analysis. We cannot continue to be the transformative lambs reclining comfortably with the baronial lions. We cannot run with the hare and hunt with the hounds. It is time we had an authentic opposition that can contest for power after 56 years of a baronial rule that has promised to build bridges to get us to Canaan only to return us to Egypt.

Kenya gave birth to a beautiful baby, the 2010 constitution. We then proceeded to hand over the baby to a child-trafficking class to take care of it. We now know what a grievous mistake we have made. We must reclaim this baby and entrust it to an alternative political leadership to avoid it being killed and its body parts being trafficked.

A recent Oxfam Report states that, in a population estimated at 51 million, 8,300 Kenyan billionaires and multi-millionaires own assets equal to those of the rest of us. This inequality can only be explained by the elites’ politics of division for the last 56 years

We want the implementation of the constitution, not the further weakening of its structure through defective and self-serving amendments that will only entrench bad behaviour. Tinkering with the constitution is an attempt at create a bypass to misrule, misgovernance, and authoritarianism. Such amendments will result in Kenya sinking deeper into a political and economic morass.

So, in this journey of a thousand miles, we are starting the last lap and taking the last step, driven by the revolutionary spirits of our ancestors and our God of freedom, equality, equity, emancipation, inclusiveness, non-discrimination, integrity, accountability, peace, national unity and prosperity.

So then, what must be done?

We have with us social movements and political parties: Muungano, Ukweli, and the Communist Party of Kenya. We also have experts and intellectuals. Let each of these groups choose a man and a woman to constitute the Interim Leadership of the Peoples’ Popular Initiative Convention (PPIC) to address this issue of alternative political leadership. Let us ensure that a multi-racial, multi-ethnic, multi-gendered, and multi-religious face of Kenya is represented as we expand this Interim Leadership and choose a collective leadership of the first among equals. Let various Committees be formed to work on narratives that run counter to those of the elites, with the sole aim of contesting for political power. A fundamental committee will be the Finance Committee because, indeed, we must raise our funds from among the Kenyan people as happened during the struggle for independence.

Without capturing state power our resources will not be safe, and our national debt will never be paid, resulting in our enslavement. We announce here that we will never pay debts that were illegally contracted or stolen. On the contrary, we will help the creditors recover their debts from those who are liable to pay them. After all, the bulk of the assets of these people are in the countries of the creditor nations, institutions, and individuals; the math will be really easy.

The Interim Leadership should ensure we work on basic papers – with the group reports here forming the background of such papers – to enable the PPIC to come up with a broad manifesto that Limuru IV will ratify before the end of the year.

Let us get down to work.

Thank you.

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Memo to Uhuru Kenyatta: Finish up and Go

With nothing but political blunders and policy failures behind him, there is only one thing left that Uhuru Kenyatta can do for Kenya, and that is this. Mr Uhuru Kenyatta, please do us and yourself a big favour; you have neither the mandate nor the wherewithal to shape our political destiny. Just finish up and go.

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Memo to Uhuru Kenyatta: Finish up and Go
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December 30 ought to be a memorable day on Kenya’s political calendar. On this day in 2002, Mwai Kibaki took office as the first democratically elected President of Kenya. When it is remembered, though, it is not for the inauguration of Kibaki, but for Moi’s humiliation. The only account we have of the chaotic event is that of Lee Njiru, Moi’s communications chief. According to Njiru, as soon as Uhuru Kenyatta conceded defeat on the afternoon of the 29th, the Kibaki people insisted on an immediate handover. The inauguration was scheduled for the following day without any consultations. At 3 p.m. on that day, Moi got tired of waiting and decided to go down to Uhuru park to get it over and done with. This is how he ended up in the chaotic situation, being jeered at and pelted with mud, bottles and whatever else people could lay their hands on. Kibaki’s description of Moi’s tenure as “years of misrule and ineptitude” did not suggest that there was any intention to treat Moi kindly.

Shortly after assuming power, the NARC administration replaced Moi’s face on the currency with Jomo Kenyatta’s. It was ill-advised. By then, the NARC dream had dissolved into a toxic nightmare. The Kibaki men — later to emerge as the Anglo-Leasing cabal — had walked out of Bomas and gone off to write the Wako/Kilifi draft constitution. Seen through the prism of the NARC fallout, this was not just further humiliation of Moi; it symbolised the resurgence of Kikuyu restorationism — the thing Kikuyu supremacists metaphorise as gūcookia rūūī mūkaro, literally, returning the river to its course, meaning the return of power to where it belongs. For some reason, the Kibaki men seemed to have conflated Moi’s humiliation with the redemption of Jomo Kenyatta. They were mistaken. The rejection of Uhuru Kenyatta in the presidential bid in Central Kenya was, in part, antipathy towards his father’s rule which had already cost him the Gatundu parliamentary seat in 1997. Kaī tūgūthīnjīra hiti keerī? (are we to slaughter our goat for hyenas a second time?), people would ask.

A decade later the humiliation was invoked in conversations that would have seemed completely unrelated — the constitutional debate on the features Kenyan currency should have. It is these sentiments that informed the constitutional provision that outlaws portraits of individuals on the currency. So there was considerable disquiet in many quarters recently when new notes revealed a disingenuous way of keeping Kenyatta’s image on the currency — his statue prominently in the foreground of the Kenyatta International Conference Centre. There are many arresting images of the KICC that do not feature the statue. The State will no doubt seek, and may find defense in legal interpretation, but it is not lost on anyone that the intention is to defeat the spirit of the Constitution. The timing is awful.

I was at a social gathering in Kiambu recently where the dismay and disillusionment with Uhuru Kenyatta hovered over the otherwise succulent goat ribs and aged single malts like the smell of stale beer. The question was raised as to how the gathering would like their sentiments conveyed to Kenyatta. The “session chairman” distilled the sentiments aired into a four-point message: Andū mena thīna mūno (the people are suffering a lot); Ee toro ta Njoramu (he slumbers like the biblical Joram); Nītūmenyete nī mūkoroku ta ithe (we have learned he is as greedy as his father); Nī gūtee (we wasted our votes).

Seemingly unaware of these undercurrents in his backyard, or perhaps all too aware of them, Kenyatta recently appeared at a public gathering where — forgetting that he is the president of all Kenyans — he unleashed a diatribe in Kikuyu, repeatedly addressing the gathering as “andū aitū” (“our people”), and assuring them that he was on top of things. I gather that the outburst was triggered by his deputy arriving at the meeting fashionably late. We witnessed the same thing happen at Kenneth Matiba’s funeral service in Murang’a when Kenyatta came out guns blazing. But his outburst at the Akorino event is of far greater significance.

I was at a social gathering in Kiambu recently where the dismay and disillusionment with Uhuru Kenyatta hovered over the otherwise succulent goat ribs and aged single malts like the smell of stale beer.

The Uhuru-Ruto political pact was sold to the Kikuyu as a peace treaty that would shield the Kikuyu diaspora in the Rift Valley from politically motivated violence — a homegrown solution for which the Kikuyu sacrificed justice for the victims of the 2007/8 post-election violence. The Akorino community has a large presence in the Rift Valley epicenters of political violence. With their distinctive white turbans, this insular, exclusively Kikuyu sect, is a vulnerable, easy target. During Ruto’s trial at the International Criminal Court, evidence was adduced that the Akorino were specifically targeted using the euphemism “plucking mushrooms.” Ruto was personally implicated in the incitement and his defiant arrival at the Akorino meeting would have been unsettling for both Kenyatta and the Akorino — it was as if he had showed up to remind them that they have a deal, and that choices have consequences. Kenyatta, who is not given to introspection or self-restraint, let rip.

The Kenyatta-Ruto succession is the third chapter in the Kikuyu-Kalenjin land-for-power pact which began with the co-option of KADU into the Government, bringing Moi into the centre of power at the expense of Oginga Odinga. In 1967 Moi was elevated to the vice-presidency at the expense of more capable leaders — notably Tom Mboya. Prof. Anyang Nyong’o recalls asking Lee Kwan Yew for his thoughts on how Singapore’s and Kenya’s development trajectories diverged, to which Lee Kwan Yew quipped that we had killed Mboya. The deal with Moi facilitated the migration of the Kikuyu peasantry into the Rift Valley, which in turn enabled Kenyatta and other wealthy Kikuyu notables to acquire for themselves the migrants’ more valuable ancestral lands in central Kenya.

The Uhuru-Ruto political pact was sold to the Kikuyu as a peace treaty that would shield the Kikuyu diaspora in the Rift Valley from politically motivated violence — a homegrown solution for which the Kikuyu sacrificed justice for the victims of the 2007/8 post-election violence

Then came the Kenyatta succession intrigues that can be said to have begun with Mboya’s assassination and the Gatundu oathing ceremonies that sought to ensure that “biki biki itigakīra Chania (the motorcycle outriders will never cross the Chania River, meaning that power would remain in Kiambu). The machinations ranged from an attempt at constitutional change to preclude the Vice President from assuming power in the event of the president’s death (that elicited Charles Njonjo’s decree purporting to criminalise imagining the death of the president) to the more sinister Ngoroko affair, a hit squad embedded in the anti-stock theft police unit suspected to have been meant to assassinate or otherwise incapacitate Moi when Kenyatta died. The scheme was predicated on Kenyatta dying in Nakuru, his favourite retreat, in which case the schemers would have been the first to know. But Kenyatta died at the Coast.

It is now clear that, for whatever reason, Kenyatta and the interest groups he represents have decided that it is not in their interest that he be succeeded by William Ruto. What is unclear is whether there is a Plan B because Plan A, a corruption takedown, is not working. There is only one way to make it work and that is to convict Ruto for corruption. But such is the obsession with neutralising him that they just could not resist the opportunity to weaponise the change of currency notes for a financial takedown. It is believed that a sizeable chunk of William Ruto’s seemingly inexhaustible political war chest is hoarded in cash that he may not be able to convert to the new currency, in effect rendering the stash valueless.

Prof. Anyang Nyong’o recalls asking Lee Kwan Yew for his thoughts on how Singapore’s and Kenya’s development trajectories diverged, to which Lee Kwan Yew quipped that we had killed Mboya

Article 262 (34) of the Constitution — the transitional provision relating to the currency change — states that “Nothing in Article 231 (4) affects the validity of coins and notes issued before the effective date.” Conflating the currency change mandated by the Constitution with this purported war on money laundering has left Ruto’s takedown hostage to the interpretation of this provision by the courts. But even the presumption that repudiating the cash hoards will cripple Ruto financially, and that crippling him financially will neutralise him politically, is wishful thinking. Uhuru Kenyatta’s anti-Ruto schemes are evidently as hare-brained as his father’s acolytes’ ill-fated anti-Moi schemes. And like Moi before him, the longer he survives this onslaught, and the more Uhuru Kenyatta reverts to type — ethnic chauvinism, contempt, dynastic privilege and arrogance of power — the stronger Ruto becomes.

The Kenyatta-Ruto succession is the third chapter in the Kikuyu-Kalenjin land-for-power pact which began with the co-option of KADU into the Government, bringing Moi into the centre of power at the expense of Oginga Odinga. In 1967 Moi was elevated to the vice-presidency at the expense of more capable leaders — notably Tom Mboya

In their “handshake” memorandum, titled “Building Bridges to a New Kenyan Nation,” Uhuru Kenyatta and Raila Odinga promised to lead the nation in correcting the sins of their fathers:

We are grateful for our fathers, we stand on their shoulders. Yet we can also see that the promise of our nation has not been met as fully as it should have been; we know there are different measures our founding fathers should have taken as they forged this young nation. H.E. President Uhuru Kenyatta and H.E. Raila Odinga are the two leaders who symbolise the many ways in which the country has gone full circle in its divisions. Intent on not witnessing the country suffer similar future cycles of the same tribulations it has since 1963, they are determined to offer the leadership that prevents future generations inheriting dangerous divisions and offer them a path to a bright future for all.

We have seen none of this. What we see instead is the same shameless politics of self-preservation, cynical ethnic mobilisation, arrogance of power and that quintessential Kenyatta disease — greed.

It has recently emerged that Uhuru Kenyatta is exerting pressure on the government to prioritise the upgrading of the Nairobi Eastern by-pass specifically to benefit the Northlands satellite city project on one of the family’s expansive, dubiously acquired, land holdings. Last week, the official State House twitter handle @StateHouseKenya was promoting Stawi, the lending platform fronted by the Commercial Bank of Africa, the Kenyatta family bank featured in this column some weeks ago. The Central Bank Governor — who is now doubling up as CBA’s chief marketing officer — lied to the public that Stawi will provide cheap credit to small businesses at an interest rate of 9 per cent per year, while in truth, the cost of the loans as measured by the annual percentage rate (APR) averages 35 per cent, and is no different from other digital lenders in the market. Corruption could not be more egregious.

In their “handshake” memorandum, titled “Building Bridges to a New Kenyan Nation,” Uhuru Kenyatta and Raila Odinga promised to lead the nation in correcting the sins of their fathers

Yet some Kenyans continue to cling to the hope that he is fighting corruption. Uhuru is not fighting corruption. He is fighting Ruto. And he no longer bothers to hide the fact that he is using state power, his office and public resources to further his private business interests. Much of what we are seeing from him suggests that he may be under the impression that the “Kenya” in Kenyatta is proprietary. One of the sins of the fathers is the personality cult that Uhuru Kenyatta is hell-bent on perpetuating by retaining his father’s image on our currency, against the letter and spirit of the constitution he has sworn to defend. But all is not lost. By showing us the middle finger, Uhuru Kenyatta has ensured that there will come a time to do unto Kenyatta what was done to Moi. And when the music starts, it will not stop at the currency — streets, airports and universities will be fair game.

Having floundered on providing the promised leadership — no surprises there — the handshake is now clinging onto the hope of constitutional amendments to either exclude or neutralise Ruto, a scheme reminiscent of the 1966 Limuru KANU Conference constitutional amendments that replaced the deputy party leader’s position with eight regional vice presidents, in effect ending Oginga Odinga’s chances of succeeding Kenyatta. This constitutional amendment scheme is now a poisoned chalice. We say in Gikuyu, mbūri igūthinjwo ndionagio kahiū (one does not approach a goat for slaughter with the knife in full view).

We have seen none of this. What we see instead is the same shameless politics of self-preservation, cynical ethnic mobilisation, arrogance of power and that quintessential Kenyatta disease — greed.

I have stated many times, and I will restate here again that the leadership that Uhuru and Raila promised behoves them to play the role of honest statesmen who would midwife political reforms leading up to a free and fair election, followed by retirement for both of them. But they have eschewed statesmanship for skulduggery and political intrigue, lending credence to suspicions that the handshake is nothing more than a Kenyatta self-preservation scheme to which Raila Odinga has been enticed with a share of the spoils and a reinstatement of the Odinga clan to the pantheon of Kenya’s ruling dynasties. It is time to end this nonsense.

With nothing but political blunders and policy failures behind him, there is only one thing left that Uhuru Kenyatta can do for Kenya, and that is this:

Mr Uhuru Kenyatta please do us and yourself a big favour; you have neither the mandate nor the wherewithal to shape our political destiny. Just finish up and go.

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