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Between the hammer of the markets and the anvil of politics: Mr Kenyatta, in debt distress

Recently released Treasury figures paint a frightening picture: not only is the government broke and struggling with declining revenues, it is now spending the equivalent of 90 percent of the wage bill on interest repayments and in July, failed to remit any monies to the Counties. Interest payments on debt are eating into recurrent expenditure, threatening to grind daily government operations to a halt. The low-down: big projects – including Uhuru Kenyatta’s legacy projects, the ‘Big Four’ Agenda and the Standard Gauge Railway – are off the table. And for Jubilee, the prospect of collapse is very real. By DAVID NDII.  

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Between the hammer of the markets and the anvil of politics: Mr Kenyatta, in debt distress
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A few weeks ago the CS Treasury was kind enough to publish and gazette the government’s income and expenditure statement for July, the first month of the current financial year.  They are only a few numbers, but they are quite revealing.

Government Income and Expenditure Statement, July 2018

Government Income and Expenditure Statement, July 2018

The government opened the year with KSh 102.8 billion in the bank. It raised KSh 99 billion from taxes, and borrowed KSh 30 billion locally, that is, total inflows of KSh 129 billion during the month. How was the money spent? Debt took KSh 68 billion, just under 70 percent of the tax raised.  The counties and development budget got no money at all. The Treasury closed the month with KSh 110.7 billion, KSh 8 billion more than the opening balance.  Why did the Treasury hoard money when the counties and development projects were starved of cash? I will come back to that question shortly.

It is tempting to think that this was only the first month of the financial year, and things will look up. Not quite. Treasury puts revenue for the full financial year at KSh 1.34 trillion which translated to a KSh 112 billion monthly average, so the July revenue figure is low but not far off the mark.  The debt service budget for the year is KSh 870 billion, which works out to KSh 72.5 billion per month so the July figure of KSh 68bn is also consistent. The domestic borrowing target for the year in the budget is KSh 270 billion, which works out to KSh 23 billion per month, so the July borrowing of KSh 30 billion is well above target. 

In essence, the July statement is a good snapshot of the state of government finances. Unless revenue increases dramatically, the only way the government will be able to stay afloat is by excessive domestic borrowing.  Borrowing more than it is doing already will put paid to any chances of recovery of credit to the private sector, which stalled three years go.  And one does not have to be an economist or finance expert to appreciate that a person, business or government spending 70 percent of income to service debt is distressed.

How did we get here? Binge borrowing.

KENYA: FOREIGN PUBLIC DEBT AND INTEREST PAYMENTS, FY 2017/18

Kenya Public Debt 2013 - 2018 KShBillion

Kenya Public Debt 2013 - 2018 KShBillion

KENYA: Average Interest Rate on Foreign Public Debt FY2017/18

As at end of June 2018, our total public debt was KSh 5.2 trillion, up from KSh 1.8 trillion five years ago, an increase of KSh 3.3 trillion. Jubilee has borrowed close to double the debt it inherited. The debt has increased more or less equally between domestic and foreign borrowing.  The second is cost of debt.

Unless revenue increases dramatically, the only way the government will be able to stay afloat is by excessive domestic borrowing.  Borrowing more than it is doing already will put paid to any chances of recovery of credit to the private sector, which stalled three years go.  And one does not have to be an economist or finance expert to appreciate that a person, business or government spending 70 percent of income to service debt is distressed.

The stock of debt has increased 187 percent but debt service outlays are up 230 percent, from KSh 264 billion to KSh 870 billion. The standout figure here is foreign interest, which has increased sevenfold from KSh 14 billion to KSh 114 billion. This in turn, is explained by two factors, foreign commercial and China debt.  Five years ago, foreign commercial debt was inconsequential— we owed only one syndicated loan and that was an exception. We were not in the habit of taking on foreign commercial debt. Five years on, commercial debt is the single largest item on foreign debt accounting for 36 percent of it.  We owed China KSh 63 billion accounting for seven percent of foreign debt. Debt to China is now up to KSh 550 billion accounting for close to 30 percent.  Commercial debt and China combined account for 80 percent of the increase in foreign debt.

We, of course, expect commercial debt to be more expensive than the soft loans from bilateral and multilateral development institutions. But Chinese debt is not cheap either.  Last year’s debt service figures show that we owed China 21 percent of foreign debt, but we paid them 32 percent of the interest. Multilateral lenders account for 33 percent of the debt but only 15 percent of the interest payments (See chart). The interest rates implied by these payments, although only a rough approximation, show that China’s debt is the most expensive at 4.8 percent, followed by commercial debt at 3.9 percent, other bilateral lenders at 2.4 percent and multilateral lenders are the cheapest at 1.4 percent. But as I said, these are implied rates, not the actual ones, as they do not reflect the debt movements within the year.

Jubilee has borrowed close to double the debt it inherited. The debt has increased more or less equally between domestic and foreign borrowing. The stock of debt has increased 187 percent but debt service outlays are up 230 percent, from KSh 264 billion to KSh 870 billion. The standout figure here is foreign interest, which has increased seven fold from KSh 14 billion to KSh 114 billion. This in turn, is explained by two factors, foreign commercial and China debt.

Different components of debt affect the budget differently. Interest comes out of the recurrent budget, and in effect from revenue. Working with a realistic figure of KSh 1.4 trillion revenue, the interest burden this year takes 29 percent of revenue up from 14 percent five years ago. In fact, interest cost is now equivalent to 90 percent of the wage bill as compared to 40 percent five years ago.  Interest on debt is crowding out the Operations and Maintenance (O&M) budget. O&M is what makes government work. It is the money that enables the police to move around, and health facilities to treat patients, government laboratories to test food and drugs and so on.

On this trajectory, it will not take long for the recurrent budget to consist of only salaries and interest

The foreign debt consists of market debt (the Eurobonds), syndicated loans and term loans.

Eurobonds and syndicated loans are similar. The key difference is that syndicated loans are short-term notes, typically sold in two-year cycles, which banks typically hold to maturity. Amortization of bonds and syndicated loans (i.e. repayment of principal) is financed by new market debt, and is known as re-financing. The principal on bank debt has to be repaid. The key concern with market debt is the refinancing risk. The government has to be able to sell new bonds as old ones mature.  The market conditions can change, or the investors risk-perceptions can change to the extent that the government is unable to sell enough bonds in which case it defaults. Alternately, it may have to offer such high returns that sooner or later, it cannot afford the interest, which amounts to the same thing— default.

Which brings me to the  KSh102 billion shilling cash hoard— the money that government had but did not spend in July. This is half the money that the government raised in the second Eurobond six months ago. It was not spent because it was raised to refinance the maturing debt, KSh 250 billion this year.  The balance has to be raised. 

The key concern with market debt is the refinancing risk. The government has to be able to sell new bonds as old ones mature.  The market conditions can change, or the investors risk-perceptions can change to the extent that the government is unable to sell enough bonds in which case it defaults. Alternately, it may have to offer such high returns that sooner or later, it cannot afford the interest, which amounts to the same thing— default.

The preferred option is to float another Eurobond, preferably a long dated one that does not come up for refinancing soon. The alternative is more syndicated loans which will cost more and come up for refinancing in two years. The market environment that they will be doing this is not favourable.  When we raised the first Eurobond in 2014, the market was awash with “Quantitative Easing” (QE) money the US Federal Reserve and European Central Bank were “printing” in order to shore up their banking systems following the 2007 financial crisis, as well as “petrodollars” accumulated by oil exporters—recall that oil was selling at over $100 a barrel). The returns on financial assets in advanced markets were close to zero or negative.

Money managers were looking for higher returns wherever they could find them. Emerging markets were growing fast, and news out of Africa was dominated by the “Africa Rising” story.

Zambia was one of the first countries to jump onto the Eurobond bandwagon.  Zambia floated a debut bond, looking to borrow US$500 million. It was heavily oversubscribed, attracting offers in excess of US$ 12 billion. Zambia accepted $750 million.  Kenya’s stated objective was to issue a US$500 million “benchmarking” bond and use the proceeds to offset a syndicated loan that was due. How this turned to a US$ 2.8 billion is a story for another day— where it went is already the stuff of legend.

Our political class seems not to have understood the paradigm shift that becoming a sovereign borrower in international markets entails. Going to the market is analogous to a business going public. When a company is private, its affairs are dealt with behind closed doors. The only way unhappy investors can express their views is with their voices, or voting out directors during the annual general meetings, and this is usually quite difficult as typically, the insiders usually have more shares than outsiders. When a company gets listed on the stock exchange, investors don’t have to wait for AGMs. They communicate with the company every day by either buying or dumping the stock. Facebook’s share price fell 11 percent (US$134 billion) in the wake of the Cambridge Analytica scandal—and that’s all the shareholders needed to say.   

Prior to “listing” in the international sovereign bond market, our financial affairs were discussed behind closed doors between the government and its external financiers led by the IMF, and enforced through “conditionalities.” Sanctions for non-performance were flexible and negotiable, and influenced by political considerations. We call this programme discipline.  After “listing”, the bond yields work the same way as share price, punishing or rewarding the country for good or bad economic management as the case maybe. We call this market discipline. The IMF continues to have a role, but a different one— providing a form of credit enhancement to the markets.

Our political class seems not to have understood the paradigm shift that becoming a sovereign borrower in international markets entails. Going to the market is analogous to a business going public. When a company is private, its affairs are dealt with behind closed doors…When a company gets listed on the stock exchange, investors don’t have to wait for AGMs. They communicate with the company every day by either buying or dumping the stock.

But Zambia’s government does not seem to have gotten that memo. Sometime ago it organized national prayers for the Kwacha, hardly a confidence building measure.  A quarrelsome negotiation with the IMF broke down in February. Last week, the government kicked the IMF out of the country for “spreading negative talk”.  The markets responded accordingly. Zambia’s bonds are trading at a bigger discount than Mozambique which has already defaulted.

As of last week, Zambia’s bonds were trading at a yield of 15 percent.  An increase in the yield corresponds to a decline in value of a bond, and vice versa. Zambia’s debut Eurobond carries a coupon of 5.375%, and was issued at a yield at 5.625%, meaning that investors paid $93.50 for $100 of face value.  A yield of 15 percent means that the bond is now trading at $36, a 60 percent fall in value.  As summed up by an investor in Zambian Eurobonds: “It’s not a place that investors would rush into even if emerging markets become popular again. People will be cautious about Zambia until it produces better numbers or gets an IMF deal.”

Why our Treasury mandarins have been bending over backwards for a deal with the IMF is now readily apparent.  IMF deal or no-deal, the government will have to produce better numbers. Healthy foreign exchange reserves are good, but reserves don’t service debt; revenues do. The markets want to see fiscal consolidation. The markets do not send missions. They dump your bonds. 

The low-down: Mega projects are off the table, as is the “Big Four.”  The SGR is not going past Naivasha anytime soon. The only order of business is crisis management – that is, if the government survives. Looking around, the odds are not good.  The Greek crisis consumed five governments. Argentina went through five presidents in two weeks following imposition of the “corralito” (small enclosure) austerity measures in December 2001. The EPRDF autocracy in Ethiopia, erstwhile poster child of Africa’s new breed of authoritarian developmental regimes, did not run out of bullets or prisons. It ran out of money, and unravelled. Sri Lanka, Pakistan and Malaysia have ejected the mega-project mega-corruption governments that corralled them into China’s debt trap. Earlier this week Sudan’s President Omar al Bashir dissolved his government and appointed a new prime minister tasked to form a leaner government “as part of austerity measures to tackle economic difficulties.”

Mega projects are off the table, as is the “Big Four.”  The SGR is not going past Naivasha anytime soon. The only order of business is crisis management – that is, if the government survives. Looking around, the odds are not good.  The Greek crisis consumed five governments. Argentina went through five presidents in two weeks following the imposition of austerity measures in December 2001. The EPRDF autocracy in Ethiopia, erstwhile poster child of Africa’s new breed of authoritarian developmental regimes, did not run out of bullets or prisons. It ran out of money, and unravelled…It is fair to say that Mr. Kenyatta is now caught between the hammer of the markets, and the anvil of politics.

It is fair to say that Mr. Kenyatta is now caught between the hammer of the markets, and the anvil of politics. That comes with the territory.

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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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Saving Lamu: How a Campaign for Environmental Justice Was Fought
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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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