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Sunday, December 22, 2013

African Economies growing rapidly, transforming slowly

Africa’s business and political leaders are buoyed by the continent’s growth prospects. But Donald Kebaruka, African Development Bank president is cautious. He argues that African countries must now pay attention not to just GDP growth, but its quality and sustainability.

Currently, Africa’s growth is powered by a confluence of factors, including foreign direct investment, the rise of the middle class and a surge in global demand for commodities, especially by China. African countries have also liberalized their economies, removing growth-stifling distortions. Moreover, a growing middle class is driving demand for goods and services.

Kenya’s last population census showed that out of 14.3 million people in employment, only 2 million people were employed in what is considered as the modern formal economy. 3.1 million people were employed in the informal sector. The remaining, 64 percent did not work for wages. This is precisely why many pundits doubt the sustainability of Africa’s growth, arguing that the ingredients for sustained and inclusive growth are lacking.

The patterns we see in Kenya underlays Africa’s growth uncertainty and undermine its capacity for structural transformation. Unlike Africa, East Asia converged more rapidly with the West because they transformed their farming populations into middle-income industrial workers and exported a wide range of sophisticated manufactured goods. In Kenya, like many African countries, today manufacturing contributes 18 percent, of GDP, just like in the 1970s.

Africa’s much celebrated rapid urbanization is not supplying African cities with high quality human capital to fuel innovation and creativity. These new unskilled urbanites find low paying jobs in the service sector, such as transport, hospitality, retail, security and construction, not in manufacturing industries. Moreover, private or public sector investment in modern industries has not grown and remains too tepid to power consequential structural transformation.

Experts have long held that dominant feature of Africa’s economic landscape – the informal sector or Jua Kali – is serving a vital social safety net function in urban areas by absorbing new immigrants from collapsing rural economies. However, it cannot provide the sorely needed productive dynamism of modern industrial society.

Over a decade of credible growth and economic expansion and increased domestic consumption has raised the expectation of Kenya’s youth. However the economy has failed to deliver high quality wage paying jobs in sufficient numbers. According to recent Economic Survey data, the working age population is growing by 800,000 per year while the economy is adding a paltry 50,000 wage paying jobs in the formal sector.

Economic growth that does not make available broad opportunities or alienates large sections of the population, especially the youth, is a recipe for social instability. A sense of inclusive economic growth and of an equitable society is the bulwark of social cohesion and political stability. In young country such as ours, where 51 percent of the population is aged between 15 and 54 years of age, social sustainable and equitable growth is central to national stability.

In my view GDP growth will not eliminate poverty or bring about economic inclusion, regardless of how strong or long. There is no such thing as trickle down. To have a truly transformative impact, economic growth must be supported by robust social policy, which promotes investment in high quality tertiary education, including vocational training.

It will be difficult to improve the quality of Africa’s human capital sufficiently to power structural transformation. According to a UNESCO report published in 2009, gross enrollment in Africa’s higher education was just 5 percent, compared to 11 percent in India, 20 percent in China and 70 percent in OECD countries.

Africa’s lack of sufficiently educated and skilled work force is profoundly depressing. An audit conducted in 2011 revealed that only 10 percent of Kenya’s civil servants have post-secondary education. This is hardly surprising given that only 22.8 percent of Kenya’s population has more than primary school level of education.

Even where governments, donors and the private sector have invested in education, there has been limited improvement in quality. Competency in numeracy and literacy among primary school leavers across East Africa is deplorable. Thoughtless expansion of university education has eroded the quality of higher education, producing functionally illiterate graduates who now swell the ranks of unemployable youth. 

Africa’s high GDP growth owing to liberalization, commodity booms, growing domestic consumption and prudent fiscal management are reason for optimism. But the fundamentals necessary for inclusive, transformational and durable economic growth are lacking.

Sunday, December 15, 2013

Kenya@50, Time for Reflection and Introspection

I have followed with interest and consternation the sundry perspectives of Kenyans as the country marked half a century of governance by the black majority. I was particularly struck by the polarity of these perspectives. It was self-flagellation or self-idolatry. For the most part there was hardly any nuance or something in between.

This would seem perfectly understandable. Ours is a very young, highly ethnically polarized and fractured country. There are stories of triumph and reasons for jubilation. Similarly there are harrowing tales of betrayal and broken promises. But still, the brazen polarity within the Kenyan society astounds and disappoints deeply. Especially when even just turning 50 as a country is singularly momentous and triumphant.

But I think ordinary Kenyans are responding to something. My sense is that the vast majority of Kenyans are reading the hand of the state in the celebration and narrative around Kenya@50. And the Kenyan state, one of the most polarizing institutions, has created winners and losers. The whole saga about Kenya@50 has in many respects not been a celebration of the triumphs and failings or the tears and laughter or the fears and hopes of ordinary Kenyans.

Kenya@50 with all its symbolism is seen largely as a fete for the dominant political class. It is seen as a celebration of the endurance of the political establishment. Kenya@50 materializes as a shameless self-adulation of the royalty of the status quo. Kenya@50 is a celebration of the dominance of state power and with it the preservation of the fundamental entitlements and privilege of the royalty of the status quo.

Half a century after the colonist left, it is remarkable that the dominant logic of the colonial state endures. It is the logic of control and subjugation. It is the logic of unbridled state power and the magnanimous father of the nation. It is the logic of a patronizing state as the supreme authority. It is the logic of citizens as passive beneficiaries of the largesse of a government that rewards gratefulness and unquestioning loyalty.

Half a century after the colonists left, it is amazing to see how little agency exists among citizens. A majority of our fellow citizens do not understand that authority and power is in their hands. And politicians, as elected servants, not deities, must do the work of we, the people. We forget that we are the authors and protectors of our democracy. We give authority to the state. We are not subjects the state.

Kenya’s independence was marked by struggle and suffering. Hundreds of thousands of engaged and active patriots who challenged the hubris and legitimacy of the colonial state gave us freedom. These patriots believed that only the people, through universal suffrage, could confer power to the state. And the state would exercise power on behalf of the citizens. An engaged citizen movement was the lifeblood of our independence struggle.

Sadly, our founders and their predecessors have betrayed this fundamental ideal. For half a century, the imperial and patronizing state has diminished active and engaged citizenship. An autocratic state flourished for nearly three decades. But an active and engaged citizenship earned us multiparty democracy in 1990 and a new constitution in 2010.

Kenya@50 must mark the re-awakening of vigilant and engaged citizenship. This must become true for our young democracy to endure. This must become true for us to dwell in peace and liberty, and for plenty to be found within our borders. Engaged citizens must hold elected leaders accountable. The rise of citizen passivity and apathy carries significant consequences for the very ideals on which we won independence, multiparty democracy and a new constitution.

As Nelson Mandela said “education is the most powerful weapon you can use to change the world”. Our education system is the purveyor of passivity. This must change. To achieve this we must transform our education from one that privileges passive memorization of facts for standardized testing to one that encourages active engagement and introspection. To be passive, the preserve of the so-called home guards, is to sell out.

Kenya@50 is not about self-flagellation by disgruntled citizens or self-adulation by the state or Jubilee loyalist. It should be about introspection, examination of our collective lives. Socrates is famous for saying, “ the unexamined life is not worth living”. And I dare say that passive citizenship is life unlived, and not worth examining.

Sunday, December 8, 2013

Nelson Mandela: Tribute to Global Moral Leader and Icon of Liberty

On December 5 2013, one of the greatest flames of the modern age burned out. But his memory will be etched forever in our grateful hearts and eternal flame will burn in our collective memories, with reverence. Nelson Mandela is perhaps the most consequential moral leader of our time. He belongs to the ages with Mahatma Gandhi, Martin Luther King, Rosa Parks and Mother Theresa.

People across the world, leaders and ordinary folk, have been galvanized in an unprecedented and universal outpouring of grief and tribute. Mandela’s family and the nation of South Africa have been deeply touched by the spontaneous and collective global love and celebration of the life of one of the finest of our kind.

Nelson Mandela founded and led Umkhonto we Sizwe, the armed wing of the African National Congress. This armed movement led the struggle against white domination in South Africa. Mandela and his co-conspirators were tried for 221 acts of sabotage to overthrow the apartheid government.

On April 20 1964 at the Supreme Court of South Africa in Pretoria, Nelson Mandela erupted on global civil rights landscape with a speech from the dock. Mandela closed his seminal deposition by delivering the most audacious and profoundly prophetic words ever. He said, “I have fought against white domination, and I have fought against black domination. I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal, which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die. “

Mandela’s words from the dock in the remind me of the words of Martin Luther King Jr. spoke at the Great March on Detroit on June 23 1963. Talking about the price of freedom, Martin Luther king said, “But if physical death is the price that some must pay to free their children and their white brothers from an eternal psychological death, then nothing can be more redemptive”. And I am reminded of Mahatma Gandhi’s words too. “Strength does not come from physical capacity. It comes from an indomitable will”. Mandela’s strength and global stature grew from his undying commitment to justice, equality and liberty.

On May 10 1994, Nelson Mandela was sworn in as the first black president of South Africa, ending apartheid and white domination. On this day, Mandela closed his inaugural speech by saying, “Never, never and never again shall it be that this beautiful land will again experience the oppression of one by another and suffer the indignity of being the skunk of the world. Let freedom reign”.

On his passing, leaders have surged forward to pay tribute to the world’s foremost global moral leader and icon of freedom, who embodied fortitude and forgiveness. As Mahatma Gandhi said, “The weak can never forgive. Forgiveness is an attribute of the strong.” In his tribute President Obama said, “ We’ve lost one of the most influential, courageous and profoundly good human beings that any of us will share time with on this Earth. "He no longer belongs to us -- he belongs to the ages." Former US President Bill Clinton who was in office when Mandela become leader of South Africa said, “Today the world has lost one of its most important leaders and one of its finest human beings”. British Prime Minister David Cameron said, “Meeting him was one of the greatest honors of my life”.

Perhaps the most profound of tribute came from South African President Jacob Zuma. In one of the finest moments of his presidency, Zuma said, “Our nation has lost its greatest son; our people have lost a father. What made Nelson Mandela great was precisely what made him human. We saw in him what we seek in ourselves." The essence of Mandela’s greatness was not the isolating and vain trappings of position or power. The essence of Mandela’s greatness was the common, everyday ordinariness of a decent, sensitive and connected human being.

Mandela was not infallible. Like all of us he was deeply flawed. He once said, "I am not a saint, unless you think of a saint as a sinner who keeps on trying." We can all do more than speak of him in glowing terms. You and I can pledge to use his example to transform our own lives. 

Sunday, December 1, 2013

Kenya’s socio-economic inequality is solvable

Globally, countries are experiencing historic levels of socio-economic inequality. In Africa especially, there are emerging concerns about whether the bulging and youthful population will benefit from their countries’ increasing prosperity.

Socio-economic inequality relates to disparities in both economic and social resources, linked to social class and includes earnings, income, education and health that contribute to a sense of wellbeing. Typically measures of socio-economic incorporate such indicators as income, education, occupation, or health status.

Kenya’s widening socio-economic inequality is making headlines again. A recent report, – Exploring Kenya’s Inequality: Pulling apart or pooling together?, suggests that the widening well-being gap among individuals and communities is a worrying scorecard, especially after 50 years of successive governments run by ourselves.

The richest 10 percent of Kenya’s households spent on average 14.3 times more than the poorest 10 percent of households in 2011. Similarly, 10 percent of Kenya’s wealthiest households control 42 percent of the total income, while the poorest 10 control just 1 percent. Over 64 percent of Kenya’s population live on spend Ksh. 7200 (USD 83) or less per month. The gap in educational attainment between middle income and poor Kenyan children is about 40-60 percent wider than it was about three decades ago. 82 percent of the population in Turkana Country is illiterate, compared to just 11 percent in Nairobi County.

Ours is a tale of three countries: the obscenely rich country; the gasping middle-income country, teetering on the precipice; and, the miserably poor country. Unchecked, socio-economic inequality has a strong negative welfare impact and poses threats to future well-being and social cohesion. In their book, The Spirit Level: Why Equality is Better for Everyone, Richard Wilkinson and Kate Pickett argue that inequality can result in non-income disparities in health and education outcomes, further undermining public investment in poverty reduction.

The drivers of socio-economic inequality in Kenya, in my view are: educational inequality,; blind and unbridled faith in trickle-down economics, especially during the Kibaki administration, historical and politically motivated bias in allocation of public resources, failure to develop the agricultural sector, which employs a majority of the poor.

Even the Pope is suspicious of trickle-down economics. In his Apostolic Exhortation released on November 26 2013, the Pope Francis writes; “Some people continue to defend trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world”.

I dare say that Kenya’s wealthy and privileged classes are the perpetrators in chief of socio-economic inequality. Over the decades, these classes have been refused to stand up for the justice and fairness. They remind of the Jesus’ parable of the Good Samaritan. Like the priest the privileged classes have seen the poor, “stripped of their raiment, and wounded”, but passed by on the other side.

Here is how the privileged classes pass by on the other side everyday; when public schools decay, they send their kids to expensive private schools, when public health care collapses, they seek healing in private hospitals, when the roads are broken and dangerous, they ride in SUVs and take airplanes to travel between our cities, when the neighborhood is unsafe they build high perimeter walls and hire private security, they disdain honesty and hard work embrace greed and corruption. In the minds and hearts of Kenya’s wealthy, prosperity is the privilege of the few. Kenya’s privileged classes have become so atomized and disdainful of a life centred on values, shared prosperity and community.

Moreover, our political and religious institutions have failed to provide a shared vision capable of inspiring of inspiring us to create a just and fair society. I think in his Apostolic Exhortation last week Pope Francis addressed Kenya’s privileged classes when he said “Whenever our interior life becomes caught up in its own interests and concerns, there is no longer room for others, no place for the poor”.

Socio-economic inequality is not an inescapable consequence of economic growth. Decline in inequality in Brazil has occurred alongside economic growth. In particular, the spread of conditional cash transfer programmes such as Brazil’s Bolsa Familia programme, under which substantial transfers are made to poor households provided children attend school and participate in health programmes, have played an important role in this pro-poor redistribution. I believe there is considerable scope for progressive policy to successfully undermine the foundation of Kenya’s socio-economic inequality. 


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