Reflections on Kenya: Whose capital, Whose State?

In The Trial of Dedan Kimathi, Ngugi wa Thiong’o challenges the colonial presentation of Kimathi as a depraved, mad, terrorist. Ngugi presents an alternative nationalist narrative of Kimathi as a revolutionary, admired by peasants and workers of Kenya. In the courtroom – interspersed with Gikuyu songs and dances that interpret episodes from Kenya’s history – Kimathi emerges as a hero.

The Supreme Court decision of 1 September nullifying the 8 August re-election of Uhuru Kenyatta as president reminded me of Ngugi’s play. In our era of “fake news” and “post-truth politics”, it is often difficult to separate truth from falsehood. It is therefore important that contemporary narratives are subjected to a critical assessment from the hindsight of history, and also with a view to the future.

So whilst we wait for the re-run of the election, I look at some of the more enduring aspects of Kenya’s political-economy. I end with some suggestions for the unknown future.[1]

Fake news about Kenya’s economy

The World Bank’s Country Director described Kenya as on the path to economic growth in an April, 2017 press release on Kenya Economic Update (KEU). The Report says:

Consistent with its robust performance in recent years, once again economic growth in Kenya was solid in 2016, coming in at an estimated 5.9%—a five-year high. This has been supported by a stable macroeconomic environment, low oil prices, earlier favourable harvest, rebound in tourism, strong remittance inflows, and an ambitious public investment drive.[2]

The KEU recommended a number of structural reforms that could accelerate growth. Credit access could, it said, be supported by reducing public sector borrowing, and the transactions cost for accessing credit through better credit reporting. Government should create “a central electronic collateral registry”, and also, “a framework to promote property as collateral with the automation of land registries and the implementation of the National Payments System Act”. Agricultural productivity “can also be improved by increasing the competitiveness of agricultural input and output markets”, and so on and so forth. The special focus of the 15th edition of the KEU advocated “a concerted campaign to develop the housing finance market that will present new avenues of income through the construction sector and other related industries”.

These are clichés repeated ad nauseam in all institutional literature coming out of the IMF/World Bank reports. Replace Kenya with any other country in Africa, and you would not notice the difference.

Brutal existential realities

Also, “growth” is one of the most abused terms in mainstream economics. It is a statistical gimmick to fool the “literati” and the politicians. It does not fool the masses. The masses know their existential realities. As a one-time political refugee in Kenya (and Director of the Uganda Refugees Relief Services which I had founded – together with other comrades from Uganda), I traversed up and down the slums of Nairobi providing whatever little help we could muster for Ugandan kindred refugees. In Dandora, Kibera, Mathare and other slums, literally thousands of people (mostly women and children – because men were looking for work in the city) sifted through trash dumped by lorry-loads of rubbish from the better-off citizenry in the city.  In the rural areas – where the bulk of the population live – the peasants plant coffee, maize and potatoes and, in return, harvest poverty. Women grow food near their huts to feed the family, whilst the so-called “cash crops” are grown to pay the taxes, and school fees.

In the city itself, we saw luxury stores, exotic restaurants, shiny limousines, banks, and tourist shops out of the reach of, I would say, some 95% of the people of Kenya. Yes, only 5 % (at most) benefit from what the World Bank describes as “robust performance” of Kenya’s so-called “growth”. In my estimation, close to 50 per cent of the population earn US$ 1 a day (Kenya’s GDP per capita, officially, is US$360).  You see thousands of workers (those “lucky” to get jobs in Nairobi) walking miles and miles from their “homes” to the city daily – back and forth, why?, because they cannot afford the bus fare.

Nothing has changed for the masses since independence.

Kenya Vision 2030

President Kenyatta describes himself as a “digital president” – i.e. for the digital generation. (I suppose this is an electioneering gambit to contrast himself with Raila Odinga who is now in his early 70’s). The Jubilee government has launched the ambitious Kenya Vision-2030 project.[3]

Among Vision-2030’s eye-catching projects are the Konza Techno City, which aims to position Kenya as a world class info-techno hub; the Kenya National Electronic Single Window System; digital migration; and the Digital Literacy Programme (School Laptop Project). There are also the one-stop-shop service centres (popularly known as Huduma Centres), which promise to enhance access to and delivery of government services to all citizens.

This is quite dazzling, but nothing new.

Look at Vision 2030 Saudi Arabia, or Vision 2030 Namibia, and several other “visions 2030s”. They all look the same. Is it simply a coincidence that all these “visions” look the same? Who or what is behind these visions? Yes, you guessed it – it is the United Nations, the World Bank, the IMF, the World Trade Organisation (WTO), and these institutions of global governance. The objective is to reach the 2030 Sustainable Development Goals (SDGs).  And behind these is the global business community.  The UN has called on business to play a big role in meeting SDG goals. And this means mainly northern global corporations and finance capital. Read this: “Sustainability North provides knowledge and perspective on organization, planning and best practices. Our goals are to minimize your costs and enterprise risks, while optimizing performance, operational efficiencies and relationships with shareholders, customers and communities.” [4]

These prefabricated “visions” simply serve the purpose of deluding the politicians into forgetting that the last seven decades of “growth” have failed to bring “development” to the vast majority of the people of Africa.

Kenya on the receiving end of WTO & EPA liberalisation

I have recorded in my Trade is War that the WTO is a veritable war machine.  At the Fifth WTO Ministerial in Cancun, Mexico, in September 2003, I was an unofficial member of the Kenya delegation at the request of the then Minister of Trade and Industry, Mukhisa Kituyi. We fought tooth and nail against the imposition of the agricultural agreement and other issues by the US-EU Empire. The Conference collapsed without its usual “Declaration.”  Mukhisa, as he leapt out of the “green room”, embraced me with victory smiling on his face.

Over a decade later, in December 2015, the WTO held its 10th Ministerial in Nairobi. Whereas we succeeded at Cancun, we failed in our own home ground. The “Nairobi Declaration” was pronounced by the WTO Director-General Roberto Azevêdo as successful, hailing the “most significant outcome on agriculture” in the organization’s 20-year history. But in our view (from the non-governmental organisations) the MC10 was a farce from the beginning to the end. Just before the close of the Conference, African NGOs issued a press statement saying: “The Green Room process excludes Africa. Africa is being marginalised on the very soil of Africa. A likely outcome of this non-transparent process would be to devastate Africa’s economy and policy space. This will create massive unemployment in Africa, especially youth and women. It will dispossess millions people of their livelihoods and become internal refugees in Africa, and easily half a million people potential refugees heading for Europe no matter what the obstacles.”

For close to thirty years, I have also been involved in the East African negotiations with the European Union (EU) on the so-called “Economic Partnership Agreement” (EPA) both as the founding chairman of SEATINI (the Southern and Eastern African Trade, Information and Negotiations Institute) and during my tenure as the Executive Director of the South Centre, based in Geneva. Four of the five members of the East African Community (ECA) – Burundi, Rwanda, Tanzania and Uganda – are “Least Developed Countries” (LDCS), and have duty-free, quota-free access to the European market.  Kenya is a non-LDC, but Kenya has succeeded (so far) to convince Burundi and Rwanda to sign the EPA. Uganda is still sitting on the fence. But Tanzania, under President Magufuli, has resisted.

In the EAC-EU relations, the playing field in agriculture remains highly unequal, with EU farmers subsidised to the tune of about 55 billion Euros per year (or US$76 billion). The EU has refused to address the issue of subsidies in the EPA negotiations, saying that it is already being negotiated in the WTO’s Doha Round. However, the current Doha negotiations have allowed EU supports to be retained! According to an analysis undertaken by the South Centre, 65% of Kenyan industries are vulnerable to unfair competition with the EU. They include food processing, textiles, paper and printing companies. These firms employ more than 100,000 people.

Furthermore, the regional market for manufacturing is much more important for local producers than any other market. Kenya exports 67% of its manufactured exports (chocolates, soap, plastics etc.) to the COMESA market. Only 9% goes to the EU.  Predictably, more EU imports will mean the displacement of domestic and regional producers and Kenya’s further deindustrialization, and now also deagriculturalisation. Kenya (and the whole region) is already facing agricultural import surges from Europe – from poultry, to dairy, cereals as well as processed agricultural products. All these sectors, should they be liberalised, will be badly affected by EU’s highly subsidised exports.

Why are our industries and agriculture not protected from highly subsidised and state-aided exports from Europe to Africa? How are these policies made in our countries?

Take the mask off the faces of our leaders who speak in the name of the Wananchi, and you will see those that are guiding the nation’s policies and actions. And hence the following question:

Whose capital?

Here is a revelation from NairobiWire:

In a country where owning a small plot of land 50 x 100 meters is many people’s elusive dream, you’ll be surprised that there is a small group of natives and foreigners who own land so big the eyes cannot see the end. A few families, stretching from colonial times, to this day control thousands upon thousands of acres. The one place they’ve been able to acquire endless tracts of land is Laikipia … Laikipia plateau is estimated to be about 10,000 sq. km or roughly 2.5 million acres. It has the biggest number of white landowners concentrated in one place, in Kenya. The plateau stretches from Mt Kenya in the east to the Rift Valley in the west.[5]

The author gives some examples; here are a few of these:

  • Ol Ari Nyiro Ranch – 100,000 acres – owned by 73 year old Italian Baroness and socialite, Kuki Gallman.
  • Ol Jogi Ranch – 67,000 acres – 225km out of Nairobi, north of Nanyuki owned by the French billionaire, Guy Wildenstein.  In 2016, the French authorities charged him for tax fraud. Court documents reveal that Guy had in 2012 declared the estate to be worth €40.9 million (Sh4.5 billion) but French authorities estimate that the estate could be worth as much as €4 billion (Sh443 billion).
  • Segera Ranch – 50,000 acres – owned by Jochen Zeitz. The Ranch is 3 times the size of Manhattan. Apart from the Segera Ranch, Jochen has homes in Switzerland, Santa Fe, Los Angeles and West London.
  • Lewa Downs – 45,000 acres – owned by the Craig family. The Duke of Cambridge and future King of England Prince William in March 2016 jetted into Kenya to attend his ex-girlfriend Jecca Craig’s wedding.

The article ends thus: “This list only covered Laikipia land owners. There are many other huge land owners in other parts of the country, including the Delameres who own over 50,000 acres in Naivasha and Charles Njonjo’s Solio Ranch which is said to be over 100,000 acres. Kibaki owns different pieces of land in Bahati, Laikipia and Rumuruti, which add up to more than 30,000 acres. Moi owns land in Bahati, Olenguruoni, Molo and Nakuru which add up to nearly 100,000 acres. And of course the Kenyattas own nearly 500,000 acres of prime land across the country.”

Turn to industry, and the picture is no different.[6]

  • Del Monte Kenya has interests in cultivation, production, and canning of pineapple products and cattle feed. It has a long history in Kenya (beginning 1948) and is now owned by two South African families.  Its 99-year lease on the land has expired, and it has applied for a further term of 49 years.
  • Carbacid Investments Chemicals manufactures liquefied carbon dioxide, gases and gas mixtures. Its majority share owners are A B Patel, B C Patel; Leverton Limited; Kivuli Limited; and T I Friedman.
  • ARM Cement Limited – whose major shareholders are Amanat Investments Limited; Paunrana Pradeep Harjivandas; and Stanbic Bank Nominees.
  • CMC Motors Group Ltd is in automobile business owned by CMC Holdings Ltd. In 2014 it was acquired by the Al-Futtaim Group, which is a large conglomerateoperating in the United Arab Emirates, and is now not only in automobiles but also in property development
  • East African Breweries, whose majority share owner is Diage plc– a British multinational alcoholic beverages company, the world’s second largest distiller with headquarters in London.
  • Eveready East Africa is an affiliate of the American Eveready Battery Company. In addition to manufacturing and marketing batteries, it also distributes a wide range of products such as shaving razors, blades and accessories under brand name Schickand Clorox household products.
  • KenolKobil Limitedis a downstream oil company, owned by Kobil Petroleum Limited, Delaware, USA. In 2008 Kenol acquired 100% shareholding of Kobil Petroleum Limited, hence the current company name  The group’s operations span seven countries across EasternCentral and Southern Africa and encompass the supply, storage, distribution and retail of a wide range of petroleum products.
  • The Industrial and Commercial Development Corporation(ICDC) is a government-owned parastatal whose primary objective is to facilitate the investments in the economy and providing financing to businesses and manufacturers. You have to look at its sources of funds, for most of it is owned by foreign investors and banks (see below – financials).

Of course this does not mean Kenyan Africans do not own their businesses. They do, but they tend to be small to medium size companies.  Also, most of the multinationals, whilst owned by foreign capital, have Africans as their chief executives, and sometimes minority shares. Also, there are some wealthy families that own big enterprises. For example, some 15 years ago flowers were produced by hundreds of small producers, providing livelihood for thousands in their extended families. Now they are produced by a four or five multinationals and the Kenyatta family owned enterprises.

I might add that it is to protect the flowers industries’ exports to Europe that Kenya wants to sign the Economic Partnership Agreement with Europe. The flowers industry draws water out of Lake Naivasha on an average of approximately 20,000 cubic meters a day. The Lake is dying. Officially 130 square kilometers, it shrank in 2006 to about 75% of its 1982 size. The papyrus swamps that were the breeding grounds for fish had almost dried up. Thousands of peasant producers and fisher folks have been alienated from their means of survival. People were facing severe problems of food and water insecurity. Effectively, Kenya exports water to Europe as the water-bearing flowers from Lake Naivasha fly to Amsterdam. If this is not the ‘Empire of the Absurd’, what is? [7]

Financials: [8]

  • Development Bank of Kenya is owned largely by the Industrial and Commercial Development Corporation(ICDC). But look closely where its funds come from and who makes its policies, and you’ll see the long hands of those who owned its shares at its inception, including Britain, through the Commonwealth Development Corporation (CDC), Germany through the German Investment Corporation (DEG), the Dutch through the Netherlands Development Finance Company (FMO), and the World Bank, through the International Finance Corporation (IFC)
  • National and Grindlays Bank. On independence, Government acquired 60% shareholding; and in 1970, it took full control of the Bank and renamed it to Kenya Commercial Bank.
  • KCB Bank Kenya Limited is a wholly owned subsidiary of the KCB Group. Although the Government owns 17.31 % of the KCB Group, the Bank is essentially part of the international financial oligarchy. It is the largest commercial bank in Kenya with assets of more than US$3.681 billion.
  • Diamond Trust Bank Group is a major banking group in East Africa, active in Burundi, Kenya, Tanzania, and Uganda. It is owned by the Aga Khan Fund for Economic Development (AKFED)
  • African Banking Corporation Limited,(ABC) is a commercial bank, established in 1984. It provides finance to support businesses and projects. In March 2017, ABC was registered with the London Stock Exchange.
  • Chase Bank is an American bank. On April 7, 2016, it was placed under receivership due to under-reporting of insider loans and not meeting the statutory banking ratios. It re-opened on 27 April 2016 with KCBproviding receiver management.
  • Credit Bank Diamond Trust Bank Group is a major banking group in East Africa, active in Burundi, Kenya, Tanzania, and Uganda.
  • Bank of Baroda has been providing to its customers Internet Banking, viz., Baroda Connect and other facilities such as online payment of direct and indirect taxes and certain State Government taxes, utility bills, rail tickets, online shopping, donation to temples
  • Dubai Bank Kenya started by Bank of Oman Ltd which later transformed into Mashreq Bank Plc.
  • Equatorial Commercial Bank Limited (ECB). It commenced operations as a fully-fledged commercial bank in 1995. ECB is a member of the Sameer Group.

There are many more finance houses in Kenya, including Gulf African Bank Ltd, Imperial Bank, Middle East Bank Equity Group Holdings Limited, Jubilee Insurance Company Limited, and so on. Not included in this list are scores of micro-credit banks that provide small loans to rural communities. These banks are largely owned by foreign banks and provide credit to the poor at usurious interest of anything from 25% to 30%.

I have also not listed shopping malls such as Uchumi; big hotels like Serena; and Communications companies like Safaricom – most of which are owned by foreign corporations.

That brings us to the issue of: whose state is Kenya?

Whose State?

To some this may seem to be an absurd question. After all, Kenya got its independence long time back – in 1963, some 54 years ago. So you may or may not agree with my analysis. My understanding is that independence is an important achievement, but it manifests itself only at the political level and that too only partially. The economy is still not liberated from the control of the empire, and so even its politics are compromised. I would state unhesitatingly that Kenya is a neocolonial state. There is convincing evidence that the economy is still largely in the hands of imperial finance capital, even if there are pockets of “national” capital in the little market left to the indigenous people.

Nonetheless, I reckon there are not more than 1,000 compradors in Kenya – meaning, agents of imperial capital – located at the top echelons of government, and at higher levels of management in the private sector. Yes, no more a thousand! I have worked with the Kenyan state for close to 30 years on issues regarding trade and investments, and I can say with confidence that 90 to 95 per cent of the bureaucrats in the state are “nationalist” (in the sense used by Ngugi). Unfortunately, they are hemmed in by the ministers and permanent secretaries who make policies at the behest of IMF-WB-WTO “free trade” globalisers.

Political independence, even if partial, is an important stage in the fight against imperialism. The common people are brought into the democratic process directly. Political parties are formed to vie for power and they have to reach out to the people for votes. People demand “free and fair” elections, and wait in long queues from dawn to dusk to cast their votes. This is important, very important.  So where is the problem? The problem, simply stated, is that none of the major parties have what I call a “national” agenda, for if they had they would unite to fight their “principal” contradiction with imperialism.  Instead of this, they divide the people along tribal, regional and linguistic grounds – and thus fuel “secondary” contradictions among the people.

Looking at the two party manifestos – the ruling Jubilee Coalition and the opposition National Super Alliance – I must say that there is very little to choose between them. Both parties promise to foster economic growth; improve education, health, and infrastructure; create employment; and, significantly, fight corruption. The electorate do not have much of a choice.  It is no wonder that people vote on the basis of the candidates’ personalities or their ethnicity, or the region they came from, rather unite to fight the main scourge which is imperialism.

Need for a socialist vanguard party

Early in 2017, Awaaz had put out a publication devoted to the Kenya elections (Volume 14, issue 1).  There were some excellent articles critically examining the process and the issues. My own piece was more theoretical and attempted to provide a global perspective. The piece ended with my observation that the material conditions of our people are so bad that Africa has been ripe for revolution for a long time. What is lacking, however, is people’s consciousness about its reasons – as we explained above.  I ended the piece with this sentence: “There can be no revolution without a vanguard party.”

By “vanguard party” I do not mean one that leads the country to a Communist Nirvana. What we need, in my view, is putting on the people’s agenda “a transition to socialism”.  Of course, “socialism” can mean many things, but I define it in a nutshell as a system based on the social ownership and democratic control of the means of production, and a fair system of the distribution of the fruits of labour for the benefit of all.

In Uganda, during the period of the Uganda National Liberation Front (UNLF) in 1979-80, we called it a “New Democratic Revolution” – not a replication of bourgeois democracy, but one that puts Socialism squarely on the political agenda. Through experience, we leant that the fundamental problem is not the class character of our petty bourgeois leadership (although that is a strong contributing factor), but the system of imperial domination and the neoliberal ideology that imprisons our mindset (including some of the best economists in our universities), and those in the state who make policies in the name of the people.

Basic Guidelines for a New Democratic Revolution

Kenya is heading for a re-election, and the country appears to be polarised along, it would appear, two personalities – Kenyatta and Odinga. This is a pity.  Nothing can be done in the short run, or even for quite some time until the new regime settles itself.

But I would like to propose that, in order to end this polarised feud and intra-ethnic violence, the left in Kenya might want to consider creating a political party that puts the new democratic revolution on the nation’s political agenda.  It will decide on its own programme of action and strategy, of course, but here are some guidelines I might suggest.

  1. Know the adversary and the strategy to defeat it: Kenya is still a neocolony of the empire; it is still subject to the laws of multilateral imperialism exercised through the agencies of the IMF, the World Bank and the WTO.
  2. Resolving secondary contradictions among the people: Differences in religion, region, language, and cultural practices are a natural part of the social map of any nation, and these, actually, enrich the nation. These differences become problematic when they split the nation and create an opening for the empire to divide and rule Kenya.
  3. A non-violent means to struggle against the empire. The battle against the empire is a long and protracted struggle. It is an epochal struggle that began with the Russian Revolution in 1917 – if not even earlier. It is not a one-day wonder. When we face a long protracted struggle the question of ends and means comes to the fore. Do ends justify the means? Does the quest for independence justify violence? My own study of history teaches me that it is the poor and the weak that end up paying the price of violence. The struggle must be by non-violent activist resistance.
  4. Leadership and training of cadres. It is very important to train cadres who understand the basics of the ideology of socialism and the new democratic revolution and learn how to hold the nation’s leaders to account.  Hence the need for a vanguard party.

I raise these issues for further discussion among Kenyan nationalists and patriots.

@Yash Tandon

10 September, 2017

[1] I write this as a citizen of East Africa and a national of Uganda. I am interested in what is happening in Kenya just as much as in Uganda.

[2] http://www.worldbank.org/en/news/press-release/2017/04/12/kenyas-economic-outlook-to-dip-in-2017

[3] http://www.vision2030.go.ke/521/kenyas-vision-2030-jubilee-revises-its-flagship-economic-stimulus-projects/

[4] http://www.sustainabilitynorth

[5] “REVEALED: Kenya’s Biggest Landowners”, Nairobiwire, 08 July, 2016 http://nairobiwire.com/2016/07/revealed-kenyas-biggest-landowners.html

[6] See: https://en.wikipedia.org/wiki/List_of_companies_of_Kenya

[7] http://yashtandon.com/flight-of-the-flowers-from-naivasha-to-amsterdam

[8] See: http://www.banks-kenya.com/index.html#

 

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