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Cloak-And-Dagger Intrigues: An Insider’s Account of Why the TJRC Report Was Delayed

In his book, The Kenyan TJRC: An Outsider’s View from the Inside, Prof. Ronald C. Slye reveals the intrigues that intensified near the date of the TJRC report release in May 2013 and how various top State House mandarins sought to influence the contents of the report.

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Cloak-And-Dagger Intrigues: An Insider’s Account of Why the TJRC Report Was Delayed
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Sometime in June 2012, I got a call from the Kenyan Truth, Justice and Reconciliation Commission (TJRC) asking if I would be willing to edit the commission’s report, which the caller said was around 1,000 pages long and needed to be edited within a tight deadline of ten days. I told the caller that an important report of that size and significance would require a minimum of one month to edit, if not two months, and that it was impossible for me to edit it in under two weeks. (For those who may not know, editing is not simply a matter of correcting spelling and grammar; it often involves consultation with the author(s) to ensure logic and consistency, and in some cases, to verify facts.) I did not think I could do a professional editing job in such a short period, so I declined the offer.

A few days later, I happened to be in Mombasa when two members of the TJRC’s staff approached me and pleaded with me to take on the editing assignment. I told them that I would, but only on the condition that another editor work with me on the report. They agreed and so I was quickly booked into the Serena Hotel in Mombasa where the TJRC team was temporarily based to put the final touches to the commission’s report.

Upon arrival at the hotel, I was immediately struck by how youthful the TJRC staff were. The majority were born and raised during the Daniel arap Moi era, and I remember wondering if they had the experience and knowledge to understand the extent of the horrors of the injustices and human rights violations that had occurred in Kenya during both Jomo Kenyatta’s and Moi’s regimes.

But what became obvious to me within the first days of my arrival was the cloak-and-dagger atmosphere of the commission. It was clear that many of the commissioners who were staying at the Serena were not comfortable in each other’s presence, and while there was a shared camaraderie between the staff of the commission, there was an air of suspicion about who could or could not be trusted. For example, I was told that every document that I would edit would be password-protected and that I should not leave my computer without logging out as even the waiters and the cleaners in the hotel could not be trusted.

At first I thought that the tense atmosphere was the result of the controversy surrounding the chair of the TJRC, Ambassador Bethuel Kiplagat, who refused to resign despite questions being raised about whether he could be an impartial chairman given that he had been a witness to some of the human rights violations committed during the Moi regime, in which he had held important positions in various capacities. His failure to withdraw from the commission had even led one of the commissioners, Betty Murungi, to resign.

Prof. Slye’s book shows that the request for an extension was not so much due to the staff needing more time to finish the report, but because the political establishment did not want the findings of the report to influence the outcome of the March 2013 presidential elections

However, having read Prof. Ronald C. Slye’s book, The Kenyan TJRC: An Outsider’s View from the Inside, it is now clear to me that something much more sinister was afoot. I had entered the commission at precisely the time when a plot was being hatched to not release the report in 2012, as per the TJRC’s mandate, but the following year – after the 2013 elections to be precise. Indeed, during my stay at the Serena, I was told that what I and my co-editor were editing may not be the final report after all, as the commission would be asking for an extension to complete it. At the time, I thought that asking for a delay in the release of the report was probably a good idea; while many sections of the report were well written, some chapters clearly needed more work, and probably needed to be redrafted.

Prof. Slye’s book shows that the request for an extension was not so much due to the staff needing more time to finish the report, but because the political establishment did not want the findings of the report to influence the outcome of the March 2013 presidential elections. Given the nature of the TJRC report – which sought to gather evidence and make public all the human rights violations and historical injustices committed by Kenya’s ruling elite since independence – it was understandable that many prominent people would not be happy with its contents, and would prefer that the report not be made public. For instance, Uhuru Kenyatta, whose father has been associated with various land-related injustices, would not want such a report to influence his chances of becoming president in 2013, particularly and especially because he was at that time also indicted by the International Criminal Court (ICC) for crimes against humanity committed after the disputed 2007 election.

However, that commissioners appointed to the TJRC (all of whom have impeccable professional credentials) would succumb to political pressure and agree to delete some sections of the report that adversely mentioned the Kenyatta family is something that I did not expect. Slye – a professor of law at Seattle University and one of three foreign commissioners at the TJRC – shows in his book that by the time the commission was finalising its report, several commissioners had already been compromised or had been coerced into taking political sides, and that by the time the report was released in May 2013, chances of the report’s recommendations being implemented were virtually nil. In addition, some of the commissioners were actively colluding with the new government of Uhuru Kenyatta to delay the release of the report.

Prof. Slye says that when he asked some of the other commissioners why they had asked for such a long extension, even though the report was nearly complete by mid-2012, he was told that it was not the commissioners who wanted an extension, but the government of Mwai Kibaki, presumably so that the report would not be released before the 2013 election (which suggests that Kibaki and his cronies did not want the report’s contents to influence that election). Slye believed that this would be counterproductive because “if our report had been released in a timely manner before the [presidential] debates, it would have provided an opportunity for the voices of the thousands of Kenyans we had heard throughout the country to be included in this important national discussion”. In other words, if Kenyans had had a chance to debate and discuss the contents of the report prior to the 2013 election, they might not have been so eager to support an Uhuru presidency.

The government of Jomo Kenyatta’s son, Uhuru, used his powers to cajole, bribe and threaten commissioners and senior staff of the TJRC to have this and other references to his father’s land grabbing removed from the report, including the testimony of Toza

In his book, which was published last year, the law professor reveals the intrigues that intensified near the date of the report’s release in May 2013 and how various top State House mandarins sought to influence the contents of the report, in particular, references to land grabs by Kenya’s first president, Jomo Kenyatta. The Office of the President seemed particularly perturbed by the testimony of a man from Kwale named Toza who claimed that he and his community had lost 250 acres of prime beach land to President Jomo Kenyatta. “The owners of the land were offered the equivalent of US$84 per acre of land, far below the then market value,” writes Slye. “Toza’s father refused the payment and, with other dispossessed residents, unsuccessfully fought to keep the land in the hands of the local community.”

According to Slye, “The government of Jomo Kenyatta’s son, Uhuru, used his powers to cajole, bribe and threaten commissioners and senior staff of the TJRC to have this and other references to his father’s land grabbing removed from the report, including the testimony of Toza.”

Why would Uhuru Kenyatta’s government go to such extraordinary lengths to doctor the report? After all, it is common knowledge that the Kenyatta family became the richest family in the country within just one generation because the patriarch Jomo went on a land-grabbing spree shortly after independence and used his enormous political influence to dispossess people of their land. This narrative is well-documented in various reports, inquiries, books and articles, and as our recent history has shown, has had little impact on the Kenyan electorate, which went on to elect Jomo’s son in the controversial 2013 and 2017 elections, even though the latter was at that time facing charges at the ICC. So why fear the obvious?

Alliance of the Accused

Slye’s book suggests that while the delay in the report’s release probably had to do with the fact that Kibaki did not want the report’s contents to influence the 2013 election, the behind-the-scenes machinations to change the report after Uhuru became president were motivated by a desire to whitewash the new Kenyan presidency. The combined “Alliance of the Accused” between the two ICC indictees, Uhuru Kenyatta and William Ruto, was viewed as “a shift away from accountability and a further entrenchment of impunity in Kenyan politics”. Both Uhuru and Ruto portrayed the election as a “referendum against the ICC”, and so probably did not want the report’s findings and recommendations to influence the ICC’s case against them. (Both cases eventually collapsed due to various reasons.)

This shift in accountability, whereby the electorate voted for candidates not despite the fact that they were indicted by the ICC, but because they were indicted, dramatically changed the political landscape in Kenya. Slye believes that it had a direct effect on the final days of the commission:

“My first indication that something was seriously amiss occurred on May 6 [2013] when I happened to visit our printer’s office to check on the status of the production of the report. When I arrived, I found commissioners [Margaret] Shava and [Ahmed Sheikh] Farah standing over our staff and directing which parts of the report to remove concerning the Kenyatta family. When I asked them under what authority they were changing the content of the report, they replied that we had to remove references to Kenyatta, as the matters were considered sub judice.”

This assertion was clearly false as none of the testimonies referring to Kenyatta were before a Kenyan court. In fact, few, if any, of the over 40,000 statements and testimonies gathered by the TJRC, including from families of the victims of the Wagalla massacre and those who were tortured by the state’s security forces, were cases that were being tried by Kenya’s justice system.

All three of the foreign commissioners – Ronald C. Slye from the USA, Berhanu Dinka (now deceased) from Ethiopia, and Gertrude Chawatama from Zambia – then signed a dissent opinion on the land chapter of the 2,000-plus pages of the final report. Part of the dissent statement reads: “With much regret, and after many tireless days of trying to reach a reasonable compromise, we are obligated by our conscience and the oath we took when we joined this Commission, to dissent completely from the amendments made after 3 May 2013 to this chapter in this Volume devoted to Land – Chapter 2 of this Volume B.”

The TJRC website, which carried the final edition of the report, has since been dismantled. The only available online version of the report, including the dissent and other related documents, can be found on Seattle University’s website.

Neither Prof. Slye nor most of the other seven commissioners were present when Ambassador Kiplagat handed over the report to President Uhuru Kenyatta on 21 May 2013. The ceremony was a hurried, low-key affair, which was surprising given that much time and many resources had gone into the commission and its work.

In March 2015, nearly two years after the TJRC report was published, President Uhuru Kenyatta, in his State of the Nation address, made a public apology to all those who had suffered human rights violations and injustices under previous regimes, and promised to establish a 10-billion-shilling fund for those affected. To date it is not clear if these funds have been disbursed to victims or their families.

Meanwhile, the TJRC website, which carried the final edition of the report, has since been dismantled. The only available online version of the report, including the dissent and other related documents, can be found on Seattle University’s website.

As part of his legacy, Uhuru Kenyatta must claim the TJRC report on behalf of all Kenyans, and ensure that its recommendations are fully implemented.

Which goes to show that this government would prefer to erase the report and its findings not just from Kenyans’ memories, but from the public domain as well. This is unfortunate because it was lack of acknowledgement of the atrocities committed by various regimes that had led to the bloodletting of 2007 and 2008. The recognition that historical injustices needed to be addressed eventually resulted in the establishment of the TJRC. By suppressing the TJRC report, and failing to implement its recommendations, the Uhuru Kenyatta government may be laying the foundations for similar violence in the future.

Wounds may heal, but painful memories and resentments can simmer for generations. As part of his legacy, Uhuru Kenyatta must claim the TJRC report on behalf of all Kenyans, and ensure that its recommendations are fully implemented.

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Rasna Warah

Ms Warah, the author of War Crimes, a sweeping indictment of foreign meddling in Somalia, and A Triple Heritage, among several other books, is also a freelance journalist based in Malindi, Kenya.

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An Injustice in Kenya’s History: The TJRC Report Six Years On

Six years later, writes GABRIELLE LYNCH, little progress has been made on Kenya’s Truth Justice and Reconciliation Commission (TJRC) despite on the gross injustices and abuses that the report outlines.

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An Injustice in Kenya’s History: The TJRC Report Six Years On
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On 21 May 2013, Kenya’s Truth Justice and Reconciliation Commission (TJRC) handed over a four-volume report to President Uhuru Kenyatta. The report outlines a range of injustices and abuses that occurred in the country between December 1963 and the end of the post-election violence in 2008, and provides a range of recommendations and a clear implementation plan. Six years later, little progress has been made on its dissemination or the implementation of its recommendations.

The TJRC Commission collected over 40,000 statements – the largest number of any truth commission to date – and 1,000 memoranda. The Commission also held public and women’s hearings in 35 locations across the country, as well as a series of adversely mentioned person (AMP) and thematic hearings

This is unsurprising given the fate of previous commissions of inquiry, the credibility crisis that surrounded the TJRC’s chairman, and the limited media coverage that the Commission’s work enjoyed. Nevertheless, I find this depressing.

The reason is that, while many paid the TJRC little attention, a significant number of Kenyans opted to relay their stories, pain and fears. This is evident from the numbers; the Commission collected over 40,000 statements – the largest number of any truth commission to date – and 1,000 memoranda. The Commission also held public and women’s hearings in 35 locations across the country, as well as a series of adversely mentioned person (AMP) and thematic hearings.

To be fair, the TJRC’s founders were aware of the inadequacies of speaking, which is why they included “justice” in the title and gave the Commission powers to recommend further investigations, prosecutions, lustration (or a ban from holding public office), reparations, institutional and constitutional reforms, and a limited amnesty.

It is also evident from my own observations; in 2011 and 2012 I spent months following the TJRC around the country attending hearings, speaking to victims, alleged perpetrators and interested parties. From these interactions it was clear that, while many who came before the Commission welcomed the chance to speak, the majority submitted statements or memoranda or provided testimony in the hope that they would be heard and that some action would be taken. As one woman explained to me after a women’s hearing in Nakuru, she was glad that she had spoken as now the Commission would “come in and help”.

To be fair, the TJRC’s founders were aware of the inadequacies of speaking, which is why they included “justice” in the title and gave the Commission powers to recommend further investigations, prosecutions, lustration (or a ban from holding public office), reparations, institutional and constitutional reforms, and a limited amnesty. However, on the question of whether recommendations would be implemented, the Commission rather naively relied on the TJRC Act (2008), which stipulated “recommendations shall be implemented”. However, such legal provisions proved insufficient; in December 2013, parliament amended the Act to ensure that the report would first be considered by the National Assembly, something that is yet to happen.

But how did the TJRC come about and what was its mandate?

The Commission was informed by the belief that, while the post-election violence of 2007/8 was triggered by a disputed election, it was fuelled by more deep-rooted problems.

The establishment of a TJRC was first considered in 2002 at a moment of great optimism and hope after Mwai Kibaki and the National Rainbow Coalition (NARC) ousted President Moi and Kanu from power. However, a task force recommendation that a TJRC be established was ignored by the Kibaki government. The idea was later revived following the post-election violence of 2007/8 and the formation of a coalition government.

The TJRC was established by an Act of Parliament in 2008, began its work in 2009 and submitted a final report in 2013. The Commission was informed by the belief that, while the post-election violence of 2007/8 was triggered by a disputed election, it was fuelled by more deep-rooted problems. It was thus mandated to investigate a wide range of injustices – from perceptions of economic marginalisation and periods of ethnic clashes to state repression and torture – from Kenya’s independence in December 1963 to the end of the post-election violence in February 2008. As a result, while some insights into colonial rule were provided as context for post-colonial realities, the report is silent on Kibaki’s second term in office and Uhuru Kenyatta’s presidency.

In addition to documenting the past, the Commission was able to offer various recommendations including further investigations and prosecutions, reparations, institutional reform and amnesty for non-gross human rights violations. The aim was to contribute to truth, justice, reconciliation, and sustainable peace.

The Commission’s task was thus impossibly large and it also faced additional challenges including a credibility crisis around the Commission’s Chairman and limited media coverage. It was also upstaged by parallel proceedings at the International Criminal Court and was working in a context in which there had been no real transition.

Given these challenges, the report is actually pretty impressive.

Critically, it does not pretend to be exhaustive and recognises how – over four years and in a single report – it could not provide a “definitive history of the broad range of violations committed and suffered” over the course of 45 years (TJRC vol. 1 2013: v).

Given this impossibility, I am keenly aware of how my attempt to summarise a report that runs to over two thousand pages involves further simplification and omission – for which I apologise. Despite this, I think it is worth marking the six-year anniversary of the report’s submission – and recognising all those who engaged with the process – by saying something about the Commission’s findings.

First, it was clear that each regime – from the colonial period through the Kenyatta, Moi and Kibaki eras – had overseen widespread abuses through acts of commission and omission and that Kenyans had suffered (and many continue to suffer) as a consequence.

The establishment of a TJRC was first considered in 2002 at a moment of great optimism and hope after Mwai Kibaki and the National Rainbow Coalition (NARC) ousted President Moi and Kanu from power. However, a task force recommendation that a TJRC be established was ignored by the Kibaki government.

The commission found that all three post-colonial regimes had been responsible for gross human rights violations and concluded that state security forces had been “the main perpetrators of bodily integrity violations of human rights in Kenya including massacres, enforced disappearances, torture and ill-treatment, and sexual violence” with northern Kenya standing at the “epicenter of gross violations of human rights by state security agencies” (TJRC vol. 1 2013: vii).

More specifically, the report outlined how the Kenyatta regime (1963–1978) was responsible for the largest number of political assassinations, and how the repression of dissent reached its apex under the one-party rule of Daniel arap Moi (1978–2002). In turn, while the commission recognised the reforms initiated by the first Kibaki regime (2002–2007), it also drew attention to ongoing corruption, ethnic favouritism and inter-communal violence, and to the collapse of the NARC coalition and the increase in extra-judicial killings, problems which, in its opinion, prepared “fertile ground (…) for the eruption of violence” in 2007–8 (TJRC vol. 2A 2013: 28–29).

The TJRC also highlighted the socio-economic effects of gross human rights violations. These included, for example, the challenges faced by former political detainees in finishing their education, securing employment and caring for their children. At the same time, the report sketches out some of the ways in which socio-economic factors impacted upon bodily integrity rights at a more general level through, for example, the relative vulnerability of marginalised people during conflict.

In terms of inter-communal conflict, the commission blamed the emergence of “negative ethnicity” on colonial rule and Britain’s adoption of a divide and rule strategy and alienation of large tracts of land, with historical grievances over land cited as the “single most important driver of conflicts and ethnic tension” (TJRC vol. 1 2013: vii).

However, all the post-colonial regimes were blamed for the perpetuation of such politics as, rather than provide redress, successive administrations “alienated more land from already affected communities for the benefit of politically privileged ethnic communities and the political elite” (TJRC vol. 1 2013: xiv) and favoured members of their own ethnic groups in employment and appointment processes (TJRC vol. 1 2013: x). According to the commission, a sense of ethnic competition was then exacerbated by multi-party politics, as “ethnicity became an even more potent tool for political [organisation] and access to state resources” (TJRC vol. 1 2013: ix–x). This combination of factors then led to “a volatile environment in which violence had been normalised and ethnic relations had become poisoned” (TJRC vol. 2A 2013: 29).

The commission also emphasised the “pervasiveness of socio-economic violations” across the country (TJRC vol. 1 2013: xv). More specifically, it found that – in addition to the socio-economic impacts of gross human rights violations – the “government’s exclusionary economic policies and practices in the distribution of public jobs and services inflicted suffering on huge sections of society at different historical moments” (TJRC vol. 1 2013: xv), with corruption in turn linked to everything from violent state security forces to poor health and education services.

In terms of spatial inequalities, the commission found that northern Kenya – taken to consist of former North Eastern, Upper Eastern and North Rift Valley provinces – together with former Coast, Nyanza and Western provinces suffered particularly harsh economic marginalisation as a result of biased or indifferent state policies. However, the commission also recognised how even residents of regions that were not identified as economically marginalised – namely, former Central, Nairobi, South Rift Valley, and Lower Eastern provinces – considered “themselves marginalised at one time or another” (TJRC vol. 1 2013: xv). The implication was that no single province had escaped economic marginalisation, with hardships often passed on to subsequent generations through a cycle of limited education and employment opportunities.

Women, minority groups and indigenous people were also found to have suffered state-sanctioned discrimination. In summary, minority and indigenous peoples were found to “have suffered gross violations of human rights on account of their membership in these communities” (TJRC vol. 2C 2013: 281). Women were found to have “suffered unspeakable and terrible atrocities … in the majority of cases … for no other reason than that they are of the female gender” (TJRC vol. 2C 2013: 151) and children were found to have been “subjected to untold and unspeakable atrocities” (TJRC vol. 4 2013: vii).

However, while the Commission suggested that most (if not all) Kenyans are victims of some injustice, it did not suggest that all Kenyans suffered, or continue to suffer, equally. On the contrary, some individuals were deemed to have suffered more severe harm or multiple injustices, while some groups were presented as having suffered more than others. For example, a minority were found to have suffered direct bodily integrity violations at the hands of state operatives, while, overall, women were said to have suffered more than men, and some regions or ethnic groups to have suffered more than others.

The Commission was “not just interested in what happened…. [but] in why things happened the way they did, what was their impact and who was responsible” (TJRC vol. 1 2013: 43). Regarding the why and the impact, the report is of mixed quality, but it is in establishing the who that the TJRC had the least success. Instead, the report details how the Commission met a wall of silence, denial and justifications. At the same time, the Commission found that the state had historically “covered-up or downplayed violations committed against its own citizens, especially those committed by state security agencies” and had “demonstrated no genuine commitment to investigate and punish atrocities and violations committed by its agents against innocent citizens” (TJRC vol. 4 2013: 10).

The commission concluded that the underlying causes of violations and contributing factors were complex and included centralised power, a culture of impunity, inter-ethnic competition, uneven development, under-employment and patriarchy.

These findings informed wide-ranging recommendations that included further investigations, lustration and prosecution of those allegedly involved in assassinations, massacres, land grabs and so forth. It also included specific apologies by the head of state for various atrocities suffered – from the torture and unlawful detention of political dissidents to acts of sexual violence committed by state security agencies during operations and periods of violence, and the state’s sanction of discrimination against women.

The report also called for the implementation of recommendations from previous commissions of inquiry, the fast-tracking of ongoing reforms of state institutions, such as the security services and judiciary, and the enactment of key pieces of legislation.

It also set out extensive guidelines for individual, collective and symbolic reparations. These included a framework for individual compensation, development policies to address the historic marginalisation of certain regions, and the establishment of public memorials to commemorate particular places, events and people.

Finally, the commission recognised how the recommendations of earlier truth commissions and commissions of inquiry had largely been ignored, stressed the mandatory nature of the commission’s recommendations, and set out a clear timeline for their implementation together with detailed guidelines for an implementation and monitoring mechanism.

The report and recommendations are thus wide-ranging, and their dissemination and implementation was always going to be a problem. However, the collective decision of members of parliament to change the Act in 2013 and their failure to discuss the report to date is – at least to me – a further injustice that marks Kenya’s history.

 

A full copy of the TJRC report as well as transcripts of many of the hearings can be found online courtesy of Prof. Ron Slye – one of the TJRC commissioners. Parts of this article draw directly from Gabrielle Lynch’s book, Performances of Injustice: The politics of truth, justice and reconciliation in Kenya (Cambridge University Press, 2018). Gabrielle is a Professor of Comparative Politics at the University of Warwick in the UK.

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Memo to Political Busybodies: There Is No Value Addition in Processing Coffee. It Is a Cockroach Idea

As long as cartels and cockroach ideas rule the roost, coffee farmers will continue to vote with their feet. Because farmers owe themselves an income, be it from bananas or avocados, it does not matter.

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Memo to Political Busybodies: There Is No Value Addition in Processing Coffee. It Is a Cockroach Idea
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Paul Krugman, 2008 economics Nobel Laureate and prolific New York Times columnist narrates how as a young man he went to work for Government and an old hand, presumably a senior government economist, explained to him that their job was mostly about fighting bad ideas. The bad ideas, the old hand went on to explain, are like cockroaches, “No matter how many times you flushed them down the toilet, they keep coming back.”

The idea of value addition is closely related to the concept of agricultural value chains. But many people who talk very forcefully about value addition do not actually understand what a value chain is.

One such cockroach idea is that we are losing money by selling our coffee raw, and we could add a whole lot of value by processing it domestically. I first wrote an Op-Ed on this idea fifteen years ago, I read sometime back that a venturesome cooperative in either Nyeri or Kirinyaga had set up a coffee processing operation but couldn’t sell the product. Someone forgot to tell them that it is at the business end – market entry, product launch marketing, distribution and all that – that the rubber hits the road. Still, hope springs eternal. I have learned that Moses Kuria, the mouthy MP for Gatundu South, has drafted a bill intended to make domestic processing of coffee mandatory.

A supply chain analysis starts with the procurement of raw materials and ends with the delivery of the product to the shelf where the final consumer picks it. A value chain starts at the other end – with the value proposition to the customer – and traces how and where that value is created along the chain all the way back to the raw material

The idea of value addition is closely related to the concept of agricultural value chains. But many people who talk very forcefully about value addition do not actually understand what a value chain is. If they did, they would not be so cocky. More often than not, they are talking about a supply chain. A value chain captures the production-to-market linkages that generate value for the customer. A supply chain captures the processes that transform raw materials or commodities into products.

A supply chain analysis starts with the procurement of raw materials and ends with the delivery of the product to the shelf where the final consumer picks it from. A value chain starts at the other end – with the value proposition to the customer – and traces how and where that value is created along the chain all the way back to the raw material. Value proposition means the characteristics that a consumer likes or prefers about a particular product that makes them choose that product, and even pay a premium over similar or competing products. The value proposition can be price, taste, appearance, durability, convenience, image, or all of these attributes and more.

Consider sneakers. A supply chain view of sneakers will seek to understand the sourcing of raw materials that go into manufacturing sneakers, the logistics of getting these materials to the sweatshops in Asia and elsewhere, volumes, sizes, styles and colours, production cycles, inventory, distribution channels and such like. A value chain analysis will start with why customers are willing to pay three or four times more for their Air Jordans than for generic products or cheaper brands, and work through the chain to see how and where the value is created.

The most expensive coffee in the world is an Indonesian coffee called Kopi Luwak, also known as Cat Poop Coffee. Kopi is coffee, Luwak is the local name for the Asian civet cat. Kopi Luwak is retrieved from the poop of the civets, which eat the cherry but do not digest the beans. A cup of this coffee will set you back anything from $35 to $100 (Sh3,500 to Sh10,000) and $200 to $1,200 (Sh20,000 to Sh120,000) per kilo of beans, about 20 times the price of other premium coffees. If exactly the same coffee bean was processed by human beings as opposed to being pooped by a civet, it would not fetch more than $40 a kilo. In effect, at least 80 per cent of the value of Kopi Luwak is generated by civets.

The Espresso & Coffee Guide lists its top ten coffees of 2019 – in no particular order – as Tanzania Peaberry, Hawaii Kona, Nicaraguan coffee, Sumatra Mandheling, Sulawesi Toraja, Mocha Java, Ethiopian Harrar, Ethiopian Yirgacheffe, Guatemalan Antigua and Kenya AA. Jamaica Blue Mountain gets an honorable mention and Kopi Luwak a dishonorable one. Most other coffee reviews have more or less the same list. The reason that Jamaica Blue Mountain does not make the list is because it is expensive, costing according to the website, double the price of Kona and four times the price of Kenya AA. But the review does acknowledge that Jamaica Blue Mountain is consistently rated as the best coffee in the world. Kopi Luwak gets a thumbs down for the ridiculous price, lack of traceability (i.e. authenticity certification) and animal cruelty reputation issues.

Why is Jamaica Blue Mountain so much more expensive than other comparable coffees? The simple answer is, it’s a matter of taste. Like wine grapes, different climates and soils produce different coffee flavours. Jamaica Blue Mountain is distinctly mellow, East African coffees are more intense, and Asian ones are more spicy but, in the end, the brand premium reflects Jamaica’s success in positioning and marketing its national brand

Homegrounds.co – a coffee e-commerce website whose top ten coffees also overlap with those on the Espresso & Coffee Guide – has Jamaica Blue Mountain as the most expensive, with several offerings retailing at between $50 and $100 a pound (Sh11,000 – Sh22,000 a kilo) and a Central American Geisha from Costa Rica and Panama in the same range at $70 a pound (Sh15,400 a kilo). All the rest, are priced between $18 and $24 (Sh4,000 and Sh5,300) a kilo. Kenya AA is priced at US$20 a pound (Sh4,400 a kilo)

Why is Jamaica Blue Mountain so much more expensive than other comparable coffees? The simple answer is, it’s a matter of taste. Like wine grapes, different climates and soils produce different coffee flavours. Jamaica Blue Mountain is distinctly mellow, East African coffees are more intense, and Asian ones are more spicy but, in the end, the brand premium reflects Jamaica’s success in positioning and marketing its national brand.

What these price differentials are not about is processing. There is no amount of domestic processing of Kenyan coffee that can increase its value from $20 to $50 a pound. Beans and ground coffee generally cost the same. A decent kitchen grinder costs Sh3,000 at the supermarket, cheap ones half that. Moreover, roasting brings shelf life issues into play; raw beans will last well over a year, although they begin deteriorating after six months. Once roasted, coffee is best consumed within 24 hours. Once ground, it loses its freshness within half an hour. Discerning coffee drinkers don’t want stale coffee, and will pay more for coffee roasted as they wait, or for green beans for that delectable treat of serving your dinner guests fresh coffee, roasted right before their eyes. It is of course possible to preserve some freshness by vacuum packing, but supermarket coffee buyers are price not value customers. The import of Moses Kuria’s “value addition” bill is to lock Kenyan coffee out of the value market.

We are then left with the question that, if Kenyan coffee can fetch well over Sh4,000 a kilo, how much of that is the farmer getting? The February 2019 market report from the Nairobi auction – the most recent on the Nairobi Coffee Exchange website – gives prices of $70 and $320 for the low “T” grade and the top grade AA, respectively, and an average of $220 per 50 kg bag. These prices translate respectively to $1.40 (Sh. 140), $6.40 (Sh640) and $4.40 (Sh440) per kilo of clean coffee, meaning that the farmer is getting no more than 10 per cent of the shelf price. It is of course the case that not all Kenyan coffee ends up in the premium market; some ends up in supermarket roast and ground blends – but that does not mean that it is of less value.

I cannot emphasise enough that there is no value addition to speak of that happens between the Kenyan AA bought at the auction at Sh640 a kilo and the Sh4,400 shelf price in the destination market. But even locally, the retail price is on average three times the auction price, The coffee trade has all manner of commercial and technical explanations, but it is hard to see them as anything but self-serving seeing as it is the trade itself that appropriates the premium. The simple answer is: middlemen – a powerful ruthless global cartel politely known as “the trade” (“the craft” would be more apt).

Let’s start with the national brand Kenya AA. You will have noticed that most coffees are named for their geographical origin. Jamaica Blue Mountain is grown on the Blue Mountains range that dominates the Jamaican landscape. Ethiopia has two coffees in our top ten list, Yirgacheffe and Harrar and Indonesia has three: Sumatra, Sulawesi and Java.

But the crux of the problem is the fact that the law denies farmers control over their product. Converting coffee cherries (the ripe fruit that farmers pick) to coffee beans that you can roast at home is a simple process that can be done on the farm manually, even on a small scale.

So, why Kenya AA and not Mt. Kenya Peaberry or Aberdare Ruiru 11? AA refers to bean size, known as screen size. AA are the largest beans.The next size is AB, which in the February market report averaged $4.40 (Sh450) a kilo. In effect, coffee from the same bush can end up having a 30 per cent price difference on account of a one millimeter difference in the size of the bean. The reason for sorting out coffee beans by screen size is roast evenness, that is, to ensure that when beans are roasted, some are not undercooked and others overcooked. Once roasted, the AA beans and the AB beans sold at a discount can be re-mixed, packaged and sold as Kenya AA. These are the “trade secrets.”

But the crux of the problem is the fact that the law denies farmers control over their product. Converting coffee cherries (the ripe fruit that farmers pick) to coffee beans that you can roast at home is a simple process that can be done on the farm manually, even on a small scale. Yet farmers are compelled by law to sell their coffee through the auction, or to appoint members of the trade as marketing agents. Cooperative members lose control of their coffee as soon as they deliver the cherry to their local pulping factory, while those with their own pulping plants lose control after milling (milling entails removing the beans from the husk, and is not very different from hulling maize).

The $100-a-pound Jamaica Blue Mountain offerings come with names like Wallenford, Clifton Mount Estate and such like. These are coffee growers, and such coffees are known as single origin coffees. This is how value is added to coffee – by market segmentation, and positioning single origin brands in different niche markets. Jamaica produces only 8,000 tonnes, and sells 80-90 per cent of it to Japan. Kopi Luwak production is between 500 and 1,000 tonnes a year. The more distinct the coffee and more niche the market, the higher value. The difference between the price of green and roasted beans of a certified single origin Blue Mountain coffee is immaterial.

Fifteen years ago, my colleague Githuku Mwangi, myself and the late Julius Mimano (the man at the helm of Kenya Railways when trains ran on time) who was then chairperson of the Kenya Coffee Growers Association – and coffee farmer par excellence – developed a plan to give control of coffee to the farmers so as to enable them to sell single origin coffees. We did all the homework, including mapping all the growing regions, developing a brand book, and securing the support of the Specialty Coffee Association to implement the specialty coffee certification system. We got many stakeholders behind the initiative but the trade cartel wore us down. A decade and a half later, so called coffee reforms are still going round in circles.

These reforms would have enabled the coffees from the different growing regions to distinguish themselves and find the consumers who have the taste and are willing to pay good money for their coffee. Mt. Kenya coffee might make a name for itself in California, Kisii Highlands coffee in Sweden or somewhere else. If the farmers were to get 70 per cent of the consumer price, the additional cost and risk of roasting, packing and marketing would not be worth taking. On the other hand, as long as the middlemen are in control, processing coffee locally makes no difference for the farmer. Whatever benefits might accrue will still end up with the middleman.

At the peak in the late 80s Kenya produced 130,000 tonnes of coffee. By 2003 when we got involved, production was down to 50,000 tonnes. With our reforms, we estimated we could get it back up to 80,000 in three years, and to 150,000 in a decade, averaging $10 a kilo, which at $1.5 billion in export earnings (Sh150 billion) would have catapulted coffee back to the country’s top foreign exchange earner. We are now down to 40,000 tonnes, earning about 15 per cent of that (Ksh. 23 billion last year).

As long as cartels and cockroach ideas rule the roost, coffee farmers will continue to vote with their feet. Because farmers owe themselves an income, be it from bananas or avocados, it does not matter. They do not owe trade cartels or the Government coffee.

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Real or “Portal” Growth: Why Businesses Are Going Bust and People Are Struggling to Make Ends Meet as the Numbers Say the Economy Is Roaring like an Asian Tiger

The economies may be growing, but because unemployment and underemployment are also rising, the incomes of those that are earning are supporting more people. People are not feeling the growth. Instead, they are feeling the financial burden of adult children who were expected to be contributing to family upkeep.

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Real or “Portal” Growth: Why Businesses Are Going Bust and People Are Struggling to Make Ends Meet as the Numbers Say the Economy Is Roaring like an Asian Tiger
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Did the economy really grow by 6.3 per cent last year, or is someone pulling wool over our eyes? Or as we say these days, is it real growth or the one you have to log into the #GoKDelivers portal to see? When the figure was first disclosed by Uhuru Kenyatta in his State of the Nation address last month, I received a call from a very disturbed Nairobi businessman who challenged me to explain to the public, in language they can understand, how the economy can be said to be growing as fast as it was during the Kibaki years yet businesses are collapsing and ordinary citizens can barely make ends meet. As it happens, my very first op-ed of this, my second stint as a columnist (I wrote a weekly column for the Sunday Nation in the mid to late 90s), published in January 2014 and titled Why you are struggling to make ends meet, was on this very subject. 

One of the observations that has led people to question the 6.3 per cent growth is the poor performance of big companies. Year after year, listed companies are issuing profit warnings. There is now hardly a listed company – other than banks – that has not issued a profit warning over the last three years. Is it possible for the economy to grow while businesses are making losses? The answer is yes.

To see how this could happen, we need to understand what GDP actually is and how it is computed. GDP is short for Gross Domestic Product, which means the quantity (not value) of all goods and services produced in an economy. Sukari Mills is a sugar producer. In 2017, Sukari produced 20,000 tonnes of sugar, down from 25,000 tonnes in 2016, due to drought.

In 2018, production recovers to 25,000 tonnes. Trouble is, during 2017, the government opens the duty-free import window, and “tenderpreneurs” inundate the country with (contaminated) sugar. Consequently, in 2018, Sukari suffers both depressed prices and depressed sales, and posts a huge loss. The GDP accountants will capture the 25 per cent increase in production, as well as the economic activities created by the imported sugar, that is, the transportation, warehousing, packaging and distribution. Sugar GDP will be up big time, even as Sukari and other millers chalk up losses.

The recovery of the agricultural sector from drought is in fact the story behind the 6.3 per cent growth figure. Agricultural sector GDP grew 6.4 per cent, just about the same rate as the economy. But it was all recovery growth since the sector had slumped from 4.9 per cent in 2016 to 1.9 per cent in 2017.

Because agriculture is the single largest sector, accounting for a third of the economy, what happens to agriculture has a big effect on the overall GDP growth figure. This year’s long rains were late, and have been poor – another challenging year for agriculture

Looking at the actual production of some principal commodities, we see that coffee, sugarcane and milk are well below 2016 levels and that tea is only 4 per cent higher. Only maize production is well above the 2016 harvest (see table). Moreover, while production increased, prices for most products were lower in 2018. Maize led the way with prices down 56 per cent, from Sh4,000 to Sh2,260 per bag. Coffee prices were down 15 per cent while tea, sugar and milk prices were down by between 6 and 9 per cent. But as observed, GDP growth only captures volume, not value – hence the fact that milk farmers are suffering from depressed prices will not be reflected.

Chart 1.

It is readily apparent that a number that fluctuates with the weather is not an ideal measure of economic performance. In fact, in economics this is not what we mean by economic growth – we refer to it as “change in output”.

Because agriculture is the single largest sector, accounting for a third of the economy, what happens to agriculture has a big effect on the overall GDP growth figure. This year’s long rains were late, and have been poor – another challenging year for agriculture. Next year the story may be the opposite.

It is readily apparent that a number that fluctuates with the weather is not an ideal measure of economic

performance. In fact, in economics this is not what we mean by economic growth – we refer to it as “change in output”. It is useful for studying macroeconomic policy on managing inflation and the like, but not as a measure of progress towards prosperity or lack thereof. For prosperity questions, we are interested in how two – often very similar – countries start out at an income level of $500 per person and twenty years on, one is at $1,500 and the other $5,000. This boils down to the following simple question: how countries raise productivity. Let me illustrate.

Land is the ultimate finite resource, and when you use it for one thing, it not available for another. Material inputs, fertilizers, tractors, irrigation systems, etc. require us to save and invest, and there is a limit to how much we can save. The whole point of saving and investing is to consume more tomorrow, but starving oneself today in order to eat endlessly tomorrow does not make economic sense.

Nanjala, a maize farmer in Busia produced 100 bags of maize last year on ten acres of land. This year she has produced 120 bags. There are a number of ways in which she could have done this. I’ll focus on three. One, she could have obtained the additional 20 bags from tilling two more acres of land. Two, she could have applied more fertilizer on the ten acres and increased her yield to 12 bags per acre. Three, she could have adopted a new high yielding variety that gives 15 bags per acre, meaning that she obtained the 120 bags from tilling eight acres. To till more land, it stands to reason that she would have had to use more labour as well. It is also the case that if she used more fertilizer, more labour and more capital were also used. But the case of adopting new high yielding seeds is different. The additional 20 bags were obtained by using less land, less fertilizer and even less seeds. The only additional input is knowledge, that is, the science and research resources that developed the new seed variety.

It is not too difficult to see that we cannot sustain growth by using more resources. Land is the ultimate finite resource, and when you use it for one thing, it not available for another. Material inputs, fertilizers, tractors, irrigation systems, etc. require us to save and invest, and there is a limit to how much we can save. The whole point of saving and investing is to consume more tomorrow, but starving oneself today in order to eat endlessly tomorrow does not make economic sense.

Knowledge is different. New knowledge and technology enable us to do more with less. And once new knowledge is introduced, in this case a seed variety, its benefits will spread widely at little or no cost; word of mouth is sufficient to spread the news about Nanjala’s 15 bags per acre all over Busia County. In economics, we say that consumption of knowledge is non-rivalrous. We can’t farm the same land, but we can share seeds. In today’s tech parlance, we say that it has high scalability.

In economic accounting, we call the growth associated with more material inputs factor accumulation. The growth that remains after we have accounted for factor accumulation we refer to as total factor productivity (TFP). TFP is the growth that enables a society to become wealthy over the long haul. If we were to rely on tilling more land to feed the burgeoning population we’d wake up one day and find that we’ve cleared the entire Mau forest – which is where we are headed. If we are to rely on irrigation and other material inputs we will, sooner or later, run out of water and drown in a mountain of debt – which is where we are headed.

But TFP is not reported in the GDP growth headline news, and you cannot see it in the data unless you know where to look. We need to do a number-crunching exercise we call growth accounting, which decomposes the growth into its sources, namely capital accumulation, labour force growth and TFP. I do not have growth accounting analysis of Kenyan GDP readily available but as it happens, the most recent edition of the IMF’s Africa Regional Economic Outlook published this past April has just what we need.

Chart 2

The chart shows Africa’s and Asia’s growth decomposed into physical capital, human capital and TFP. These three components are what I defined earlier as factor accumulation. Human capital is “proxied” by the change in average years of education in the workforce. By proxy we mean that it is not the actual human capital but the closest data we have that approximates it.

In the decade and a half from 2000 to 2014, Africa’s economy grew by 5 per cent per year. Productivity grew at less than 1 per cent per year – about 17 per cent of the growth – with the rest coming from factor accumulation. Asia grew by 7.2 per year, with productivity growth at 2.7 points per year, contributing close to 40 per cent of the growth.

The red segment at the bottom of the bar is the TFP while the green, light blue and dark blue segments above represent growth attributable to more workers (or labour force growth), more human capital (better educated/skilled workforce) and more physical capital (infrastructure, machines, etc.) respectively, all of which add up to factor accumulation. But the IMF has its colours the wrong way round. The red ink is what corresponds to profit in a business, while the blue ink is capital expenditure, a cost. The red ink is what pays the bills.

In the decade and a half from 2000 to 2014, Africa’s economy grew by 5 per cent per year. Productivity grew at less than 1 per cent per year – about 17 per cent of the growth – with the rest coming from factor accumulation. Asia grew by 7.2 per year, with productivity growth at 2.7 points per year, contributing close to 40 per cent of the growth.

From 2015 onwards, Africa’s productivity growth has slumped to 3 per cent per year, and productivity growth has turned negative. This translates to investing more and getting less output per unit of investment. If we go back to Nanjala’s farm, it is the equivalent of increasing acreage from 10 to 12 acres but getting 108 bags, meaning that average yield has declined from 10 to 9 bags per acre. While Asia’s economies have also slowed down a little, productivity growth has actually increased to 3 per cent per year and, in fact, it is investment in physical capital that has slowed down the most.

The seemingly small magnitude of this divergence in productivity growth is deceptive. An economy where incomes are rising by three per cent per year doubles its income in 25 years; the one per cent economy will take 70 years. This is precisely the difference in growth rates that has left people asking how the Asian Tigers left us behind. Plus ça change, plus c’est la même chose.

Kenya is typical of the Africa growth story. This analysis is making a point that I have belaboured over the last five years – that we are squandering money on vanity infrastructure projects of little or no economic value. When the government borrows domestically and invests unproductively, it deprives the private sector of the use of those domestic savings on more productive investments. We also do not produce the capital goods that go into these investments. There is no money that comes into the economy when we borrow from China to build a railway. What we are really doing is taking Chinese goods and services on credit, but as every shopaholic knows, the credit card starts burning a hole in the pocket right away. Asia on the other hand, manufactures its capital goods, hence its infrastructure and other capital investments stimulate and create jobs domestically.

We already know that most of the capital is in public infrastructure with little or no impact on productivity – you need only think of the SGR railway. While the growth accounting analysis shows us the employment contribution, it does not tell us what the expanding workforce is doing. We know that the majority are absorbed in the informal economy where they have little capital to work with, since the government has hogged all the domestic savings, leaving little for the private sector to equip workers with productive capital. While the aggregate data will show that capital per worker is rising, in reality, it is falling since the aggregate figure includes every worker’s slice of the SGR railway, for example. Moreover, we do know that our economies are not creating nearly as many jobs as they should. As the African Development Bank’s (AfDB) most recent Africa Economic Outlook report laments, “the rapid growth achieved in Africa over the last two decades has not been pro-employment”. This is a consequence of the infrastructure-led growth paradigm that this very institution bears most responsibility for promoting.

The economies may be growing, but because unemployment and underemployment are also rising, the incomes of those that are earning are supporting more people. People are not feeling the growth. They are feeling the financial burden of adult children who were expected to be contributing to family upkeep.

Next time you hear them trumpeting five, six, seven per cent GDP growth, you know what to show them.

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