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Monday, February 29, 2016

Africa must chart unique development path


Africa’s economic performance in the last two decades has been impressive. Leaders of multinational corporations and development bureaucrats have proclaimed the irreversible march of prosperity. But Africa’s path to durable and inclusive prosperity is far from certain.

Many economists and development experts believed that Africa’s most promising path to growth would be through modernization of agriculture and the advancement of rural prosperity. Many, including myself have argued that harnessing the combination of vast land resources and the abundance of rural labor would lay a most durable foundation for inclusive growth and economic transformation.

Imagine the eruption of agriculture-based cottage industries, which in turn spur increased productivity and value addition while attracting requisite enabling investment in services and infrastructure. I am talking about water and sanitation, financial services, health centres, electricity, broadband Internet, roads and railways.

Africa’s growth has been impressive and the continent has shaken off the stigma of squalor and deprivation. But such growth has not spread beyond the clutch of economically dominant minorities and the precincts of major urban neighborhoods. For all intents and purposes, Africa’s rural economies are comatose. The tragedy is that this is where a majority of Africans are born and live.  

A majority of these rural Africans practice subsistence agriculture. They keep livestock and grow crops, mainly for subsistence. In many rural African communities cattle is not reared for beef or hide. Cattle are kept as fungible capital assets. Many cleaver things have been said and written about why Africa’s agriculture is shackled by low productivity. What is tragic is that so little has been done, based on these cleaver diagnoses, to increase the productivity and profitability of Africa’s agriculture. My view is that we don’t have the right diagnoses.

How one might think about Africa’s growth and shared prosperity is so different today than it was 20-30 years ago. A path of inclusive growth and prosperity predicated on mass employment through industrialization and agriculture is pretty unlikely, thanks to globalization and large educated youthful population.

The emergence of China and other countries like India, Mexico, Indonesia, Turkey and Brazil as industrial powerhouses has made improbable Africa’s path to industrialization. African economies have been turned into warehouses and consumer destinations for cheap manufactured goods. A fairly sophisticated service economy is emerging to support this veritable trend of de-industrialization.

Take a walk downtown Nairobi and you will encounter a staggering density of retail shops. Our roads, streets and alleys are chocking with merchants who brave the sweltering heat, dust and foul air to sell Chinese toys, razor blades, clothes, watches, cheap art, groceries and mobile phone accessories. The business of building and renting warehouses is both booming and lucrative. What used to be Nairobi’s industrial area is now warehouse central.

Agriculture is unlikely to drive meaningful growth. FAO estimates that the average age of the African farmer is about 60 years. A study by the East African Institute of the Aga Khan University revealed that only 11 percent Kenya’s youth would prefer to work in agriculture. Interest in farming was negatively correlated with educational attainment. Moreover youth below the age of 25 years were least interested in farming. Emboldened by high education and enticed by the glamour of urban living the youth are city-bound and find low paying jobs in the service sector more appealing than working the land.

Today a large number of African countries are largely agrarian, but characterized by rapid urbanization, a well-educated youthful population, a trend of de-industrialization (thanks to globalization), a weak modern economic structures and primordial democracies. It is not surprising that a majority of the so-called development experts get Africa wrong. The content is replete with failed projects.

The structural transformation models of the past century focus on the mechanism by which underdeveloped economies transform their domestic economic structures from a heavy emphasis on traditional subsistence agriculture to a more modern, more urbanized, and more industrially diverse manufacturing and service economy. Such simplistic staging of development is irrelevant for 21st century Africa.

In my view African scholars lack the conceptual apparatus with which to define generalizable theories to guide economic growth, which take into account Africa’s unique contemporary context. Many intellectuals, including myself have argued for structural transformation for Africa. However, the transformation must be integrated and capable of simultaneously leveraging agriculture-based rural economies, educated youthful population, urbanization and the emergence of a strong service sector.  

Tuesday, February 23, 2016

Imperatives for a sustainable planet


Last Friday, I had the privilege to speak at a conference on “Transformation Towards Social Justice”. This conference was organized by Akiba Uhaki Foundation, Catholic University of Eastern Africa and other partners to commemorate the World Day of Social Justice.

The organizers asked to give my reflections on the imperatives of a sustainable planet. I thought this was an extraordinary opportunity and remarkable sense of leadership on the part of the organizers. Sustainability and justice are seldom muttered in the same breadth. When we think of sustainability what often comes to our minds is a band of soil loving and tree hugging people, environmental activism. What social justice conjures in our minds are rights and liberties, justice and democratic governance.

Evidently, we are on a collision course with our planet, our only home. Our addiction to fossil fuels has touched off a climate crisis. The impacts global warming and its attendant feedback effects are playing out with especially painful outcomes in the lives of young and old, rich and poor. In the voracious quest for food, fiber shelter, mobility, and forage, we have destabilized the meticulous balance of nature. Our civilization, especially in the last 50 years has presided over the most brutal annihilation of essential biodiversity. Nobel Laureate Paul Crutzen has called ours the Athropocene, the epoch of unbridled dominance of mankind.

Our planet is in peril not only because we have decimated fishes and forests or belched out greenhouse gases and triggered global warming. The constriction of civil liberties and the proliferation of conflict are a threat to sustainability. The march of civil liberties and fundamental rights has been excruciatingly slow for the vast majority. The collapse of multilateral consensus mechanisms and the decline of global leadership have allowed conflict and violence to fester and spread.

Nearly two decades after the US invasion Iraq is far from peaceful. Afghanistan is in turmoil. The world has mostly watched helpless as Syria hurtled down the path of sovereign ruin. Somalia is unstitched half a decade after Kenyan troops invaded it neighbor with a mission to inflict trauma and damage” on Al-Shabab. Today East Africans watch helplessly as Burundi stares on the edge of an ethnic Armageddon, which could spill over into neighboring Rwanda. The plunder of natural resources in the DR Congo is in many ways linked to governance failure.

The virulent Ebola epidemic would have been avoided cared about a bat’s eye view of the landscape. Forests are a critical habitat of the fruit bat, Ebola’s reservoir host. It is likely that the near ecological collapse of Lake Victoria is linked to the combined effects of the introduction of the Nile Perch and eutrophication owing to excessive sediment and nutrient loading for unsound land management. Jared Diamond in his seminal book Collapse: How Societies Choose to Fail or Survive, illustrates based on historical and archeological evidence demonstrates the link between resource depletion and collapse of societies.  

Increasingly, politicians and scholars are suggesting that drought which, exacerbated hunger, unemployment drove farmers into the cities and help escalate civil unrest in Syria. Prior to the eruption of the civil war, Syria experienced its worst drought on record causing over 1.5 million people for migrates from farms to cities.
Something else, which is truly unprecedented, is strongly linked to sustainability. Here in East Africa, our demographic structure, especially the fact that over 80 percent of the population is below the age of 35 has huge implications on the sustainability of our society. East Africa’s youth are the best educated of any generation, with 60-80 percent having attained post primary education. College enrollment is on the rise.

Today, over 440,000 undergraduate students are enrolled in Kenya’s private universities. Many analysts have characterized the unprecedented youth bulge as a blessing and a curse. A recent study by the East African Institute provides cause for hope and an imperative to expand opportunity and provide positive role models for our youth.

Our success as a species is inextricably linked with planetary stewardship and our capacity to advance the fundamental liberties and peaceful co-existence within societies and among nations. We must advance shared prosperity and equality by removing barriers to health, education and opportunity, especially for women, youth and minorities Moreover, we must deal definitively with the climate crisis. Our generation must pioneer a green energy revolution and halt global warming.

Sunday, February 21, 2016

Aid vs. foreign direct investment debate is unhelpful


Africa has made tremendous progress. On average life expectancy and literacy levels are higher than at any time. Today we witness and enjoy levels of opulence and civil liberties that would have been inconceivable three decades ago.

But alongside affluence lives deprivation. Many elementary needs are still unmet for millions of Africans. Tonight, many children will not see their fifth birthday. About 100 babies will be born dead in Kenya today. In the 21st century, one in three children in this country are born without assistance by a qualified healthcare professional. About 70 percent of women aged between 18 and 35 years living in rural areas are unemployed. Moreover, Kenya is ranked sixth among the top 10 countries in Sub-Saharan Africa with the large populations living in extreme poverty.

Delivering these unmet needs is at the heart of Africa’s development challenge. As an enterprise or scholarly field, the ultimate goal of development is to raise incomes and advance prosperity by providing access to a wide range of goods and services to those presently poor. The UN MDGs and its successor the SDGs are about a framework for prioritizing global development to eliminate poverty, hunger, disease and, advance equitable and sustainable prosperity.

Four sources of capital flows drive Africa’s development, namely: domestic revenues; remittances, Official Development Assistance (ODA); and, Foreign Direct Investment (FDI). In 2012, 17 countries received more FDI than ODA, suggesting that sub-Saharan countries are less dependent on aid. In 2014 ODI inflow to Africa was $28 billion. In the same year, FDI inflow was $54 billion, nearly twice ODA.

It is instructive to note that about 55 percent of ODA is country programmable assistance; hence a recipient country can have considerable influence on how aid is spent. Although global flows of ODA increased by 66 percent between 2000 (when the MDGs were agreed) and 2014, leading development economist and proponent of SDGs Jeffery Sachs argues that ODA flows – at the current average of 0.29 percent – from OECD countries are miniscule. The United Nations ODA target for OECD countries is 0.7 percent of gross national income.

In 2012, Africa’s FDI was dominated by inflows into the service and primary sectors (natural resources, especially minerals and oil and gas), which account for 48 and 31 percent respectively. Manufacturing only accounted for 21 percent of FDI stock.

The checkered history of ODA and its decline relative to FDI over the last two decades has motivated a debate on what form of capital flow suits Africa best.

William Easterly and Africa’s own Dambisa Moyo have put forth a scorching denunciation of what in their view is catastrophic failure of ODA. Dambisa Moyo has argued that all forms of aid is bad and encourages corruption, fuels civil wars and leads to bad and unaccountable governance. Dr. Moyo has argued, instead for promotion of trade, investment and capital markets to promote economic growth.

Conversely, Jeffery Sachs and Bill Gates have argued that aid works and when properly designed can deliver vital investments in health, agriculture and education. Similarly, Paul Collier has argued that smart aid can help build the necessary human capital and strengthen institutions of governance critical to making non-aid financial flows more effective.

FDI flows into Africa are currently concentrated in the service and primary sectors. What we have seen in this period of FDI dominance, even with limited data, is jobless growth and the rise of inequality. In the absence of effective governance and strong institutions receipts from extractive resources, just like huge ODA inflows, are associated with weak development outcomes and lack of accountability.

The argument for or against ODI or FDI has degenerated into a nonsensical ideological bloodsport among academics and donors, which has also entrained neo pan-Africanist politicians who characterize receiving aid as surrender to charitable outside interests. Africa does not need this debate.

The ODA vs. FDI debate is useless. The question for Africa is how different forms capital flows can be leveraged to promote development. It is about effective use of both external and domestic financial to flows support not just growth but inclusive growth and economic transformation.

What we need are approaches that enable differential diagnosis of development problems and deployment of responsive and pragmatic funding and investment models. In the end, Africa’s growth must be measured by outcomes such as employment creation, human capital development, strong institutions, good governance and productivity growth.

Monday, February 8, 2016

Kenya faces an intergenerational integrity crisis

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Five years ago, I was part of a conversation about our values as a society. There was consensus in the group that corruption and ethnic mobilization in politics would push Kenya off the cliff.

A young man rose up to contribute to the discussion. Joe was 21 years old then. He said that among his generation, what we call corruption was normal and that was the Kenya he knew. The group was stunned.

A study of East African youth by the East African Institute of the Aga Khan University revealed that 30 percent of Kenyan youth believe corruption is profitable, 50 percent believe it doesnt matter how one makes, 35 percent of the youth would readily take or give a bribe and 40 percent would only vote for the person who bribed them. Only 40 percent of our youth think it is important to pay taxes.

You probably know about the 400,000 uncollected national identity cards. Just 17 months before the next elections, you can bet this is politically significant. One of the 400,000 IDs belongs to someone I know.

Early last week a friend went to the County Commission office in Westlands to collect her ID. Having guessed the purpose of her early morning visit, the man across the window declared that her ID was not in the large tray containing thousands of IDs bundled and stacked in alphabetical order. With naïve innocence, she asked how the man would be certain that her ID was not in the stack without knowing her name. The public official asked, with authoritative impatience, for my friend’s name. Her last name starts with letter “H”.

The officer picked up the large tray and went into the back office. He returned with the large tray but without the IDs in the letter “H” section. With solemn finality he reaffirmed that my friend’s ID was not in the stack. My friend recounted this incident to her taxi driver who said she passed an invitation to give a bribe to collect her ID. This is an incredible and shameful story. But such are the everyday experiences of Kenyans.

Early this year Chief Justice Willy Mutunga said Kenyan citizens were at war with mafia-style cartels run by political bosses and corrupt businesspeople. A couple of weeks ago President Kenyatta gave a shocking eyewitness account of two police officers collecting bribes from motorists in Mombasa. Parents bribe school heads to secure admission for their children. Doctors receive bribes to make referrals. Motorists bribe security guards to get parking slots. Pastors take money to say special prayers.  And now, the  $2 million bribery allegation against Justice Tunoi threatens to bring down the Supreme Court. In November last year Mr. Kenyatta requested Pope Francis to pray for him as he leads the war against corruption.

This is the society in which Joe and millions young Kenyans, who constitute about 80 percent of our population, are being raised. Corruption is no longer regarded as some moral or ethical aberration. Corruption is just “Chai” or “Kitu Kidogo”. Corruption is culturally acceptable in our society.

Somehow, we idolatrize corrupt individuals: they hold high office; we think of them as successful we elect them to lead; they are charitable; they sit in the front row in religious house, and our faith leaders say special prayers for them; they are role models for the youth. Corruption does not only beget more corruption, it breeds a culture of corruption. Ours is a veritable culture of corruption, transmitted across generations.

Corruption in Kenya is not about a few vulgar individuals. Ours is a culture that honors and privileges the corrupt. It is therefore improbable that a presidential decree backed up by papal intercession or an empowered EACC backed up by a legion of donors can even begin to undermine the allure or powerful appeal of corruption in our society.

A significant proportion of our youth believe corruption is profitable. This presents a worrying intergenerational crisis of integrity. Corruption is simply theft, immoral pillage of public resources. Corruption is an evil, one no less than tyranny.

The fight will be long and bruising because corruption will fight back. We need an indefatigable moral resolve by all citizens, along with unforgiving, hardwearing social sanctions, which ostracize corrupt individuals. But most of all we need a values revolution, a profound transformation in the moral and ethical foundation of our society.

Tuesday, February 2, 2016

Kenya's education reform must be driven by evidence, not whim


The value of education, for personal growth and national prosperity, is incontrovertible. However, the benefits of education can only be appropriated on condition that children in school actually learn.

Although free primary education dramatically improved gross enrollment, learning seldom occurs in our schools. Globally, about 250,000 million children in grade four do not have the minimum literacy and numeracy standards. Here in Kenya, nearly one-third of the children in grade six do not have the numeracy and literacy standards expected of a child in grade four.

We have paid too much time worrying about enrollment in school, retention and completion of primary school, and too little attention to learning outcomes. Imagine an uneducated mother, Paulina, who sacrifices everything she has to keep her child in school for eight years only to find out that the child can barely read or write or add. Paulina’s nightmare is that her child will wind up as an unskilled laborer, just like her. What happened to the promise of education, the skills and the dream of a job in a distant city? She must wonder.

Paulina’s quandary is personal and obscure. But it is not uncommon among parents and children in rural communities and poor urban schools. We are talking about 200,000 or (21 percent) of the children who scored way below 200 marks in the last KCPE exams. We seldom think about them. Soon after we are done idolizing the top scorers we begin worrying about slots in public national schools and top county schools. Paulina’s predicament remains a private crisis.

But in my view Paulina’s predicament must be at the centre of a serious national conversation about education. Paulina’s predicament is at the heart of the grave reality that attending primary school is not the same as learning. No amount of enrollment and retention or completion will provide our children with the learning and skills they need to succeed in the 21st century.

Education must more than a constitutional obligation of the state or some SDG commitment. Education must be an inalienable that is inextricably bound with learning. I argue that the national conversation must move beyond a focus on inputs to expand access to public and private investments that provide the conditions, which support learning.  

Our current model is really about the curriculum; timely completion of the syllabus and super test scores. The schools are merely grade factories and the children are graded products. This must change if learning has to occur. The child must be the alpha, centre and omega. The child’s development as measured by learning, not some meaningless test score, must determine the standard by which we measure the performance of our education system.

I am sympathetic to the frustration we all have about our education, and especially the conversation about the need for a structural overhaul. There is talk about moving from the current 8 – 4 – 4 to a system that require mandatory two years in pre-school, six years in primary school, three years in junior secondary (with an exit option to vocational training), three years in senior high school and three years of undergraduate education.

My view is that fiddling the structure of education would be a trivial, unhelpful intervention. The problem is neither content nor structure. The problem is that our children are not learning. Numerous studies have shown that between 50 and 65 percent of teachers in both private and public schools don’t have basic reading and math skills required to teach grade four pupils. Without a doubt, teacher quality is atrocious. Moreover, teacher absenteeism is a chronic, especially in public schools.

Common sense and evidence recoils at some of the ideas and suggestions around reforming our education. No amount of tinkering with the schooling structure will produce learning. And we must drop the hysteria about competency-based education. What we have to be clear about is what learning domains are important to our children in a competitive globalized world, and how student progress can be measured.

The education reform we need is one that recruits, motivates and retains the best teachers, and one that makes learning and the child the focus of education. Moreover, education reform must not be about more disciplinary content. Learning must be about a capacity for critical thinking, analytical and moral reasoning, creativity, collaboration and the ability to process and critically evaluate data and information.  

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