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Wednesday, September 19th, 2018

 

Dadaab refugee camp offers more than safety from war

By NG’ANG’A MBUGUA
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The 80-km stretch of road between the Liboi border point and the Dadaab Refugee Camp in Garissa County is as dusty and bumpy as it is fraught with the risk of attacks by Al-Shabaab terrorists.

However, for the refugees fleeing the violence that has rocked Somalia since the ouster of President Siad Barre in 1991, this road makes the difference between hell and heaven.

Since the early 1990s, hundreds of thousands of Somalis have used this road to escape the fighting and find refuge in Dadaab, which today hosts 209,606 refugees.

Of these, a vast majority — 201,496— are Somalis. Interestingly, slightly more than half of the total population are children of schoolgoing age. One of them is Hussein Abdi Ahmed.

Ahmed is much more than just a number. He packs a penetrating gaze. His angular face is set with determination.

His pink shirt is clean and well-pressed. And although his English vocabulary is severely limited, he is neither afraid nor embarrassed to initiate a conversation.

Before he came to Kenya in 2008, Ahmed, now 16, used to herd camels in Mogadishu but violence forced him and his family to flee to safety in Kenya.

He had never been to school. This changed when he got to the Dadaab Refugee Camp, where he enrolled in a class taught by what is known in Dadaab as ‘incentive teachers’.

These are refugees who have some form of training or an interest in teaching.

Usually, they are Form Four leavers who are given a short induction course and then sent to class in the hope that they can help to impart knowledge to their charges.

Next month, Ahmed will sit for the Kenya Certificate of Primary Education (KCPE) examination. Although he is fluent in the Somali language, he cannot speak Kiswahili at all.

This notwithstanding, he will be sitting a Kiswahili paper in the national examination, competing against candidates who have spoken the national language most of their lives.

“If I was taught (and examined) in Somali language, I would pass the exam because I could understand better,” he says through a translator.

REPATRIATION

Given the challenges he faces, it is not surprising that his ambition is to become a teacher.

Dadaab has 22 primary and six secondary schools, 22 early childhood education centres and nine alternative basic education centres.

The latter caters to adults and other learners who are too old to enrol in regular schools.

In March, the government of Kenya insisted that refugee camps must be closed and those living there encouraged to return to their countries of origin.

As a result of the directive, 15 schools were closed. Most of these were in Ifo 2, which formed part of the larger Dadaab Refugee Camp complex.

Most of the refugees hosted there were relatively new and had fled from the drought that had ravaged Somalia.

Following the government order, 78,176 of them agreed to return to their homes voluntarily. Those who could not were absorbed in other parts of the Dadaab complex.

When the Ifo 2 camp was closed down in May, so too was Mwangaza Primary School, a magnificent institution that hosted over 3,000 learners. Today, Mwangaza looks like a ghost town in the baking sun.

About 2,300 of its former students and 40 teachers were moved to other schools in Dagahale and Ifo camps.

However, by the time it was closed down, it had already been registered as an examination centre by the Kenya National Examination Council and will host KCPE candidates who were registered there.

In a tent snuggled between two rows of classrooms at Hormuud Primary School, are learners who form part of the 983 children from Mwangaza absorbed at the school.

But, challenging as their circumstances are, they are much better off compared to the 135 learners who have various forms of disability.

It is hard enough to be a schoolgoing child and a refugee, but it is much harder when one has a disability such as blindness in a society where all forms of disability are frowned upon.

PERFORMANCE

To make their life more bearable, humanitarian organisations, such as the World Lutheran Foundation, organise regular check-ups for these children. On the day the Daily Nation team visited Hormuud, an audiologist, Mr Hussein Wahule, had gone to examine the children.

According to the school’s deputy headteacher, Mr Dahir Shafee Sigale, Hormuud had a mean score of 262.65 last year, an improvement from 224 in 2016.

2015 was the best year for the school, when it had a mean score of 294. Last year, its best student had 346 marks, no mean feat given the challenges of living in a camp, where the homesteads have no furniture that learners can use to study comfortably after school and where other social and economic challenges abound.

“Many of our teachers are not qualified,” Mr Sigale says. Ironically, many of the refugee teachers who qualify often opt to leave the camp, meaning that the schools will always have a shortage of qualified staff.

This is a problem that Mr Idris Budhul Shurie, the Dadaab Sub-County Director of Education, is well aware of. “Sixty percent of the teachers are untrained. And the number of teachers is inadequate compared to learners,” he says.

GIRLS’ RIGHTS

Not surprisingly, it is easier for boys to remain in school than it is for girls. For instance, when girls start menstruating, many opt to drop out even though some schools offer sanitary pads.

Due to cultural factors, and considering there are no female headteachers in refugee schools, it is difficult for girls to ask their male headteachers for the pads.

And when girls drop out early, that also means there is a smaller pool from which schools can hire female teachers.

In turn, since female teachers are few and far between, girls have fewer role models to make them stay in school longer.

“Girls in camps become mothers very early and this keeps them from school as they have to nurture children,” Mr Shurie explains.

Muna Hussein Omar, a 20-year-old mother of two, is one such student. She told the Daily Nation that she was married off at the age of 15.

However, she was divorced three years ago when her husband asked her to return to Somalia with him and she declined. He left with their eldest son while Muna was left with the younger one, who is now three.

Today, Muna is a Form Two student at Hagadera Secondary School. Although her father lives in Dadaab, Muna lives separately with her son.

Besides fending for the boy, which sometimes keeps her out of school, she constantly worries that one day, her estranged husband might come for the boy when she is in school.

Every morning, for her peace of mind, she leaves the boy with a relative. Initially, Muna had enrolled at an alternative learning centre but had to join regular school when the centre was closed.

ROLE MODEL

However, she is lucky to have joined secondary school.

“Few girls join Form One due to early marriage,” said Mr Tongolo Benson, the chief principal of Hagadera Secondary School. This year, the school has only 72 girls in Form Four, compared to 137 in Form One and 112 in Form Two. However, it has a bulge of 224 in Form Three, a pointer that there is still hope for girls.

Indeed, one of the school’s former students, Ms Deko Mohamed Ahmed, remains a shining example for other girls.

After scoring a B- in last year’s Kenya Certificate of Secondary Education (KCSE) exams, Ms Ahmed qualified for a scholarship to study at a Canadian university.

In her gap year, she has been hired to teach English and Islamic Religious Education at her former school.

“Every girl in school has a dream that they will become somebody who has the potential to help society,” Deko says. “I urge them to make their dreams come true.”


Fortunes continue to dwindle for once rich tobacco farmers

By ELISHA OTIENO
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By RUTH MBULA
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Semi-permanent houses, tucked between maize and tobacco farms punctuate much of Uriri Sub-County, Migori County.

Occasionally, naked children play by the roadsides as their parents are seen hurdled in groups, perhaps discussing what the future holds for them.

Most of these people are tobacco farmers. But fortunes in the sector have continued to dwindle by the day due to local and global factors.

Migori is the biggest tobacco producer in Kenya, accounting for more than 70 percent of the yields produced in the country, according to Alliance One Tobacco, a leaf-buying organisation. But today, the county has nothing to show for that feat.

The industry was collectively paying out over Sh1.7 billion annually to farmers in the region. Alliance Tobacco Kenya was spending Sh1.2 billion on Migori farmers annually.

But now, poverty is evident in regions where tobacco was once grown, stretching from Kuria East, to Kuria West, Suna West, Uriri and Rongo sub-counties.

The once flourishing cash crop is dying away; imposing makeshift mabati (iron sheets) buying shades which were constructed by the tobacco multinationals have been vandalised while the remaining ones have been taken over by the farmers’ co-operative societies.

While some farmers have already quit tobacco farming altogether, others are still hanging on, hoping for miracles.

Mr Otieno Osoro, 43, from Wang’ Chieng’ village in Uriri remembers the days when tobacco farming posted better returns.

“We used to make good money when the sector was booming but now it is a pale shadow of its former self. The firms have introduced many grading systems which only help the companies to pay us peanuts,” he said.

“I used to plant tobacco on my three acres farm but now [I] am only allocating one acre to tobacco. The remaining space is set for food crops,” Mr Osoro added.

Leaf hawkers who operate in collusion with the tobacco firm officials have also spoilt the business, he claims.

Mr Olima Omondi said the pay today is too little. “We are paid about Sh70 per kilo, from the previous Sh180 per kilo. Companies complain that the quality of leaf from Kenya is no longer attractive in the world market.”

“From my two-acre farm, I can only make Sh40,000 – which cannot feed my family of six children and pay their fees,” Mr Omondi said.

Tobacco matures in six months. Mr Masel Oyugi however says tobacco is their main cash crop despite the frustrations.

“We need more companies here to buy our leaf… the exit of Alliance One from the Kenyan market has left British American Tobacco Kenya Limited (BAT) to enjoy monopoly and to singularly decide what to pay us,” he asserted.

He says the firm inputs they are being given by the BAT Kenya usually eat into their earnings, a claim the company refutes.

“We pay a lot for the fertilisers which are deducted from our delivery dues and leaves the farmer with nothing to take home. And this is why most farmers are scavenging for alternative cash crops,” Mr Oyugi said.

CORRUPTION

But BAT Kenya has come out to deny claims of frustrating their contracted farmers.

The firm’s manager at Oyani Leaf centre in Migori – Denis Sila – said they were giving their farmers the best treatment.

“We have challenges but we are trying our best. Of course we cannot buy all the tobacco being produced by farmers because we have our own targets as a company,” he said.

Mr Sila explained that he will investigate claims of corruption in the purchase of leaf from growers.

“We do not take bribes in order to buy the cash crop from farmers because we have a binding contract with them…but we will investigate the allegations,” the official added.

Mr John Ochola of the Oyani Tobacco Farmers Sacco is telling farmers not to lose hope.

“We will continue to engage BAT leadership to improve our terms of payment. Although we know leaf prices are dictated by the world market, but there is something that can still be done,” he said.

The Migori County Government has already threatened to kick out tobacco companies that have consistently failed to pay farmers dues on time.

Agriculture Executive Valentine Ogongo said the county administration “will not sit back and watch farmers suffer every year due to delayed payment”.

Mastermind Tobacco allegedly owes local leaf growers over Sh50 million while a tobacco merchant – Eastoback – has alleged unpaid delivery dues amounting to Sh7 million.

“This is the last warning to the two companies. Cooperate with our farmers or go elsewhere,” he told the representatives of the two companies in his office.

Mr Ogongo said only BAT Kenya “was trying to pay their dues on time”.

“The assembly is soon passing Tobacco Control Bill which will give us powers to register afresh, firms allowed to operate in this county,” Mr Ogongo said.

Representatives of the companies said they were making arrangements to offset the dues in the coming weeks.

ALTERNATIVE

But this may not save the ailing sector as over 10,000 tobacco growers in the county are already switching to other cash crops which can fetch them quick money. Some have gone into large-scale maize farming while others are planting cane.

“In the absence of a serious leaf merchant who can pay us on time, tobacco is a doomed crop. I have uprooted the leaves on my farm to create space for cane,” Mr Brodrick Kowino from Uriri Sub-County said.

But not all the tobacco leaves produced by farmers in the region is being bought, companies are citing low quality.

Subsequently, thousands of acres of the tobacco grown in Suna West, Kuria West and Kuria East sub-counties risk going to waste unless a new tobacco buyer came to the rescue of the growers.

“The future looks very bleak. We do not know who will buy our tobacco in the farms,” Mr Augustine Mwita, the national chairman of the Kenya Tobacco Growers Association, said.

“We are asking both the county and national Governments to speed up the process to look for us a new investor who is able to buy all our cash crop,” he said.

The farmer’s woes were compounded by the exit of Alliance One Tobacco Company four years ago, and which was the biggest leaf buyer in the county. The firm moved to Uganda and Zimbabwe two years ago, citing poor leaf quality in Kenya.

Mr Owino Likowa, a former Migori MP says tobacco farming is turning into a liability to farmers in the county.

“Poor pay, coupled with health risks one is exposed to while attending to their farms has made the business less lucrative. Farmers must just switch to other cash crops for meaningful benefits,” he noted.

The declining fortunes in the sector have seen massive layoffs by the tobacco firms within the last 10 years.


Plan to move teachers to public service stopped

By FAITH NYAMAI
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The High Court in Nairobi has put on hold plans by the government to place close to 4,000 teachers under the employment of the Public Service Commission.

The move, according to a teachers union, would have seen them lose their benefits.

The Kenya Union of Post Primary Education (Kuppet) had gone to court to fight the plan to transfer over 3,780 teachers, tutors and lecturers in technical and vocational training institutions, who are employed by Teachers Service Commission, to the PSB.

Those affected are teachers and tutors in national polytechnics, technical institutes and vocational institutes.

On Wednesday, five teachers and tutors obtained a conservatory order stopping the TSC from transferring them. Justice Onesmus Makau ordered the teachers’ employer not to effect the transfers or remove them from their payroll.

“That conservatory order is hereby granted barring the respondents from transferring services of the petitioner from TSC to Public Service Commission or removing the petitioners from the TSC payroll until notice of motion is heard,” Justice Makau said.

In their petition, the teachers termed their transfer as illegal and against their employment agreement. Kuppet had also filed a separate case in court seeking to have the plan to transfer of the 3,780 tutors halted.

Kuppet Secretary-General Akelo Misori said teachers stand to lose their benefits if they will be transferred. “The TSC flouted the employment act and transferring them to the PSB will be against their rights,” said Mr Misori.

According to Kuppet, the plan to transfer technical and vocational training teachers was finalised without official communication to the union and to the teachers.

“The affected teachers are our members and are currently enjoying negotiated benefits from TSC, transferring will affect the benefits which we have tirelessly fought for,” Mr Misori said.

He said that the TVET teachers sought employment of TSC and they were incorporated in the payroll.

The teachers were employed under terms and conditions of employment specific to the TSC and not PSB, he said, adding that the relationship between the TSC and the affected teachers is governed by legislation under the Employment Act, which gives them responsibilities to the employer.

Mr Misori said that transferring the teachers amounts to terminating the teachers terms of employment with TSC, resulting to loss of benefits and downgrading of their terms of service without their express permission.


Somali herders and Kilifi locals dispute escalates

By KAZUNGU SAMUEL
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The conflict between Somali herders and the local Giriama community over pasture in Ganze, Kilifi County, is turning ugly by the day.

The dispute has been raging for more than 40 years and the government intervention seems far from succeeding.

Last month, two brothers were attacked and injured by the knife-wielding Somali herders in Mnagoni village.

The attack rekindled the bitter memories the locals have been going through since the early 60s when Somali pastoralists drove thousands of their animals to the area for pasture.

With the locals claiming that the herders invade their farms illegally, the herders on the other hand claim that they pay chiefs and their assistants to be allowed to graze in their lands.

The bitter feud climaxed after the last month attack, prompting Ganze Deputy County Commissioner Richard Karani and Ganze MP Teddy Mwambire to call a public baraza at Mnagoni to address the issue.

We talked to one of the victims in last month’s attack, Mr Jumwa Mwambogo, at Makande estate in Mombasa. His ordeal was evident when he showed us several stitches on his left cheek inflicted by deep knife cuts.

August 7 this year was the day he was attacked by three Somali herders when he went to enquire why they were grazing on his five-acre maize farm.

Were it not for his brother Ramadhan Shikari who rescued him, he would not have lived to tell the story.

TRESPASSING

Mr Shikari also sustained deep cuts on the arm as he tried to grab the knife from the herder who was baying for Mr Mwambogo’s blood.

Mr Mwambogo, 45, says he is lucky to be alive. “They would have killed me were it not for my brother who was nearby,” the father of three said.

Mr Mwambogo said the pastoralists have brought a lot of suffering to the people of Bamba.

“When I tried to ask them why they were grazing on my land, one of them attacked me. I pushed him to the ground,” he said.

Ganze OCPD Patrick Ngeiywa confirmed the incident and said that the brothers accused the pastoralists of trespassing and destroying cowpeas and green grams which were yet to be harvested.


KPA boss Manduku advises freight agencies to diversify

By KAZUNGU SAMUEL
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By EUNICE MURATHE
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Owners of Container Freight Stations (CFSs) should invest in other sectors of the economy, Kenya Ports Authority (KPA) managing director Daniel Manduku said, adding that the Mombasa Port is now able to handle the volume of cargo it receives daily.

Lately, CFCs have been downsizing or relocating from Mombasa due to increased ferrying of goods via the standard gauge railway(SGR).

“If you go back in history, you will understand clearly why CFSs were created. First, it was because the port was congested and inefficient,” Mr Manduku said.

He explained that since cargo transportation is now efficient, there is no need for periphery storage at the port.

“The port is less congested. They must be honest with themselves. Once there is no congestion, by either increasing our capacity or having efficient evacuation systems, then we don’t need CFSs,” he said.

By last week, cargo at the port had reduced to 10,500 twenty-foot equivalent units due to efficient transportation by seven or eight trains daily from Mombasa to the inland container depot (ICD) in Nairobi via the SGR.

Some 1,300 containers arrive at the port daily, with about 800 being loaded to the trains.

Mr Manduku was speaking on the sidelines of the International Association of Maritime Economists conference at Pride Inn Hotel in Shanzu, Mombasa.

The event began on Tuesday, September 11, and ended on Friday.

His statement is expected to hit CFS businesses even harder, as they have trimmed down their operations in the wake of competition from the cargo trains.

More than 100 truck drivers have also been sacked owing to lack of business, the Kenya Transporters Association says.

DONGO KUNDU

Mr Manduku said conducive business opportunities are not found only in CFSs, but also in other sectors of the blue economy.

“That is why we are starting the Sh30 billion Dongo Kundu Free trade project. Investors in CFSs should instead tell us to fast-track construction of this port.

“That project is a game changer. It will help them start industries and open up thousands of jobs. It is a good place for these investors. It is not a must that a CFS must work at Mombasa port; they can invest in the blue economy. That is why we are constructing the Sh20 billion Shimoni Port and another one at Kilifi,” he said.

Shippers Council of East Africa chief executive Gilbert Langat said CFSs have reduced their operations due to increased transportation of goods by train.

“But they have not closed down; they have merely downscaled,” he said.


MPs must go at the root of economic crisis

By OBUYA BAGAKA
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The Constitution has vested substantial budget-making power in Parliament to give a voice to the people’s representatives in determining how public resources are allocated and utilised.

But instead of being guided by the wider public interest, MPs have over the years used that power to advance their own welfare, conferring vast benefits onto themselves while showing little concern for the country’s financial health.

This financial year, for example, taxpayers will pay Sh1.7 billion pension to MPs who lost in last year’s elections, a 700 percent increase, after they awarded themselves the most generous deal in Africa.

They also lavish Parliament with public funds. In the latest budget, Parliament got Sh37.579 billion — double the Sh19 billion allocated to the newly expanded Legislature in 2013/2014.

INVESTMENT

Is it right that Parliament should receive more than two times the Sh15.168 billion offered to the Judiciary, which serves millions of Kenyans while the Parliamentary Service Commission only looks after a few hundred well-paid MPs?

Kenya has over the past one-and-a-half decades witnessed sustained growth, with significant improvements in infrastructure and social services.

The Jubilee administration has driven the most ambitious infrastructure project since the British-built Mombasa-Kampala railway a century ago — the standard gauge railway.

The SGR could be a profoundly transformational investment, consolidating Kenya’s position as the anchor regional economy.

Millions of citizens now have expanded access to affordable healthcare under the National Hospital Insurance Fund cover, mothers deliver in hospitals for free and 700,000 senior citizens receive monthly stipends.

PUBLIC FUNDS

All that costs money, and public borrowing has helped to finance some of the projects. Reviewing tax rates to manage deficits and ensure solid fiscal grounding is, therefore, prudent.

One would expect MPs to debate in a sober and mature way what the best legislative options are. Instead, what we have seen in recent days is grandstanding and hollow political rhetoric.

Even after President Uhuru Kenyatta halved the proposed fuel VAT, MPs are playing to the gallery.

Parliament is one of the most wasteful and profligate spenders of public money and should be a prime target for proposed cuts on discretionary spending.

A rationalisation (as demanded by the High Court) of expenditure items such as the Constituency Development Fund (CDF), which is superfluous under the two-tier devolved system suggested by the Constitution (and commands a whopping Sh30.9 billion annual allocation), is long overdue.

MPs should forego some of this expenditure to prevent more taxation. They can’t have their cake and eat it.

Parliament still has time to redeem itself from the self-dealing path it has embarked on. MPs should not think only of short-term concerns, but consider the wider public interest and the need to maintain proper fiscal health.


Debt: It’s poor management, not size

By MOHAMED WEHLIYE
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In the university, a supplementary exam is a second chance to pass a subject. Students would normally cut short their holidays to sit ‘sups’.

Hence, the National Treasury and the National Assembly have had their holidays cut short to work on a supplementary budget before even the 2018/19 books opened.

The good news is that this can be used to stave off a full-blown cash flow and macroeconomic crisis. The bad news? It won’t happen.

Looking at the Treasury statement, it seems Cabinet Secretary Henry Rotich has avoided the hard choices and gone for cosmetic changes.

The main purpose of a budget should be to set priorities and make the necessary trade-offs. The statement, which the House was to debate, fails that test.

So much is wrong with the 2018/2019 Budget that we don’t even know its size.

Mr Rotich put total expenditure at Sh2.55 trillion; the budget out-turn of the July gazette notice had it at Sh2.629 trillion. His statement wants grand total expenditure reduced from Sh3.026 trillion to Sh2.971 trillion. It is a dog’s breakfast!

If you cannot accurately measure or estimate it well, you definitely cannot manage it. There has been a lot of talk and focus on the size of the national debt and little on its mismanagement.

Prudent management of government finances requires debt strategies and planning that take into account the level of debt that can be financed over a determined period without an unrealistically large future correction to the balance of income and expenditures.

It is because that was not done that we have had a National Assembly session this week. Equally important is the management of the composition and structure of the debt portfolio for its cost to be low and for it to be as less vulnerable as possible to market shocks.

The current debt portfolio is highly vulnerable to financial, fiscal and macroeconomic conditions.

The overall size is not right, the mix between domestic and foreign debt not optimal and the administration has shortened the average duration of the debt from over nine years to almost four — meaning there is more pressure to refinance the debt at any one time.

That is influencing the economy inversely in the form of high debt-servicing costs, leading to decreased expenditure on development.

Debt servicing costs, at more than Sh800 billion, are way above development spending. That is likely to worsen, given that we have to refinance over Sh200 billion of maturing foreign currency-denominated commercial debt.

And we would have to do it without the insurance programme from the IMF. The World Bank’s latest review has pointed out the weak capacity of the Debt Management Office (DMO) and its lack of clear leadership and accountability.

It says although the Treasury publishes Debt Management Strategy papers, it isn’t clear that this is being followed. Even the publication of monthly debt bulletins on its website ceased last year.

The only way out of the current budget problems and a potential debt crisis is to manage the debt portfolio well.

The best strategy is to substantially reduce the deficit to less than five percent. You cannot get that right if your revenue projections are always wrong — or pie in the sky.

The fiscal mathematics of any budget hinges on one key assumption: The projection for revenue growth.

The Treasury projects revenues of Sh1.9 trillion as they somehow think the economy will grow at six to seven per cent — despite increasing debt, rising taxes, public expenditure cuts and most private sector CEOs expecting profits to grow by a maximum two per cent.

We will be lucky to collect Sh1.5 trillion this fiscal year — meaning we must borrow the Sh400 billion shortfall, making the stated 5.8 per cent budget deficit fake news. The actual deficit is, thus, eight to nine per cent.

A lower deficit will reduce the cost of debt servicing. The refinance risk the government is carrying with a huge holding of Treasury bills could potentially allow it to roll over the domestic debt much cheaper if it reduced its borrowing.

A 200 basis points saving on the Sh2.6 trillion domestic debt could save it Sh52 billion in interest — double the Sh17.5 billion the unpopular fuel VAT would bring in — and stimulate credit to the private sector.

For the foreign debt, the best strategy to reduce the interest bill and create fiscal space would have been to stay with the IMF.

The fuel VAT is a symptom of a bigger problem that, if not managed well, will bring the house down.

You cannot have five consecutive years of more than eight percent fiscal deficit and not experience a debt crisis. This is the problem MPs should be tackling, not VAT.

Mr Wehliye is a senior adviser to the Saudi Arabian Monetary Authority. [email protected]


There’s something cute hidden inside the fight over fuel price

By CHARLES ONYANGO-OBBO
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It was remarkable seeing the bipartisan wave of anger that swept Kenya recently over the implementation of a 16 percent value added tax on petroleum products.

There aren’t many things, except, perhaps, unga (maize flour) prices, which ordinarily generate that level of consensus outrage across the political divide.

The general argument is that the cost of living is already too high, and pump prices are already at wallet-bursting levels, as it were.

And then there is the classic one you encounter everywhere in Africa — that additional revenues don’t make any difference to the lives of the people, because they are simply stolen by corrupt officials and politicians.

President Uhuru Kenyatta’s intervention to have the VAT halved to eight percent has mollified only a few, with many feeling that it still is too high.

INSECURITY

While the issue of fuel cost is a big one, it’s likely not the primary reason for the loud protests. Rather, the reason is to be found in for whom the fuel is unaffordable.

There are trends in Africa’s broader economies, and in the urban areas, that if leadership paid attention to more closely would help predict the kind of backlash that greeted the fuel VAT in Kenya.

For example, a few days ago, Ugandan President Yoweri Museveni was speaking on television about the rampant insecurity in the south of the country.

He cited the dramatic increase in the number of cars and motorcycles in the country over the past 30 years, to make the point that monitoring the bad guys using vehicles to commit crimes and get away had become a Herculean challenge that the government didn’t have to face before.

Kenya has nothing on Uganda when it comes to the boda boda (motorcycle taxi) as anyone who’s visited the capital Kampala knows.

President Museveni said that in 1987, there were some 4,187 registered motorcycles in the country. This year, the number is 1,063,922, most of them boda bodas.

Twenty years ago in Uganda, and certainly in Kenya, too, the fellows who felt the pinch of fuel prices were car owners and public service passengers, to whom the prices were passed.

Today, you also have boda boda people, who are several times more than car owners, to contend with.

In the case of Uganda, the daily newspaper, The Monitor, said in a report last year that boda boda is easily the second-largest employer in the country after agriculture. Those are, obviously, very many people.

IMPORTATION

The margins in the boda boda business are small, and the people who use it, many of them among the lowest earners in Africa’s burgeoning urban areas, are hyper-sensitive to the smallest of price changes.

In the case of Kenya, it has been compounded by what might call the “boda bodasation” of car ownership.

Maybe until 10 years ago, the profile of the first-time car owner who didn’t get it from his or her parents was standard in Kenya.

A 26- to 30-year-old employee in some office buying a Sh500,000 second-hand Japanese import using a loan from their employer.

But the gig economy (hustling) has exploded in Kenya, and the import of even cheaper, smaller second-hand Japanese cars has risen.

It used to be that the Toyota Vitz was the cheapest car one could buy, but now it is a near-luxury. There are all sorts that one gets for under Sh200,000 — even from hustle money.

In turn, the demand for these cars has been driven by the expansion of Nairobi and towns, fuelled by both the population growth and the labyrinth of new by-passes and outer ring roads, that led to a boom in relatively affordable housing for early entrants into the job market in the far-flung parts of the capital city.

Therefore, unlike the average car owner of old, who, after buying a motor vehicle had anything up to Sh500,000 lying in an account and wouldn’t feel the fuel pinch, today’s is younger and has barely Sh25,000 left after paying rent and other bills.

The boda boda sector and “small” car owners are products of some of the few dynamic things that are happening in the African economies today.

We cannot manage economies for them as we did 20 years ago.

The competition for their pockets is intense, and they are touchy about who reaches in.

One industry that understood that quickly is the mobile phone companies. There was, indeed, a time when the cheapest airtime you could buy was Sh500. Today, it is Sh5.

The telcos have grown rich and fat, and the economy has benefited immensely, hasn’t it?

Mr Onyango-Obbo is the publisher of Africapedia.com and explainer Roguechiefs.com. Twitter: @cobbo3


Time for a holistic dialogue on how government spends money

By PETER WARUTERE
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Parliament’s support for the controversial value added tax on petroleum products has opened a window of opportunity for a holistic, in-depth examination of how the national and county governments spend the public funds they are allocated for recurrent and development expenditure.

Higher taxes cannot be a viable solution where funds raised from taxes, loans and grants are being spent recklessly and stolen with impunity.

Essentially, the fuel VAT, which President Uhuru Kenyatta halved to eight percent when he rejected Parliament’s move to suspend for two years the initial rate proposed in the Finance Bill, only offers a temporary reprieve to the government’s chronic financial crisis.

The government needs to fix its spending problem, starting from how the funds are allocated and how efficiently they are deployed.

The greatest point of contention is why it continues to raise more money when it cannot even spend what it has put on the table.

Last month, the National Treasury reported that ministries and government agencies failed to spend Sh218.5 billion during the last fiscal year.

EXPENDITURE

The explanation is that the capacity for the government to absorb the allocation is less than optimal. Procurement issues, particularly with programmes funded by external development agencies, also cause delays in project implementation and disbursement of funds.

Another concern is why the government has failed to resolve the systemic massive recurrent expenditure that crowds out the space for development spending.

In the current fiscal year, for instance, the government proposes a recurrent expenditure of Sh1.5 trillion, according to the Budget.

This means that more than 90 percent of the expected Sh1.6 trillion tax revenue would be spent by the national and county governments on salaries, operations and maintenance.

The size of recurrent expenditure, at 15 percent of the national economy or gross domestic product, is worrying, particularly compared to the spend on development, which has been allocated only Sh568 billion, or 5.7 percent of GDP.

More distressing is how fast the recurrent budget is driving the government deeper into debt to fund development.

The huge financing gap of Sh595.5 billion, between the estimated revenues of Sh1.8 trillion from taxes and appropriations in aid and the projected expenditure of over Sh2.46 trillion, is expected to be funded by foreign and domestic debt.

An extensive investigation of the expenditure items that constitute the recurrent budget should, ideally, give a comprehensive perspective of why the government is unable to cut back on its bloated spending.

Anecdotal evidence points to lots of funds being spent on unnecessary domestic and foreign trips — including “benchmarking” missions, office hospitality, entertainment, committee allowances and endless workshops.

Presumably, such perks have turned public office into a gravy train. Little wonder there’s a strikingly increased interest in government jobs in recent years, even from private sector executives who leave highly paying jobs in great haste for the much lower pay.

The other major problems in government are wasteful spending and corruption.

While numerous cases of fraud and abuse of office have been exposed, there’s less focus on wastage — which includes spending on the same items, such as purchase of equipment, every year, even though the items supposed to be replaced are in good condition.

This could also apply to works done in one year being repeated in subsequent years.

The issue is whether such activities are repeated every year, or the funds associated with these expenditures are siphoned out of the system through paper transactions — more like the fictitious Goldenberg transactions of the early 1990s.

This is the hard reality that the government should confront. As the crackdown on corruption continues, there should be a more intense assessment of the public expenditure system to weed out wastefulness and inefficiencies.

The long-term goal should be to reduce recurrent expenditure and increase public funding for development, driven by the ‘Big Four’ agenda for economic transformation — boosting manufacturing, enhancing food security, ensuring universal healthcare and providing affordable housing.


UPDATE 1-Mars aims to tackle “broken” cocoa model with new sustainability scheme

* Mars says it will push for higher premiums for cocoa farmers

* New plan to tackle deforestation with GPS mapping of farms

* Company will spend $1 bln over 10 years on new strategy (Adds Breakingviews link)

By Ana Ionova

LONDON, Sept 19 (Reuters) – Mars Wrigley Confectionery launched a new sustainability strategy on Wednesday with the aim of combating deforestation, child labour and poverty in what it called the “broken” cocoa supply chain.

U.S.-based Mars, the maker of M&Ms and Snickers, said it had revamped its cocoa strategy in an effort to tackle problems that the company and wider industry had so far failed to address.

“The cocoa supply chain as it works today is broken,” John Ament, global vice president of cocoa at the privately owned company, told Reuters in an interview.

“It’s time to recognise this and to build a new model and a new approach that focuses on putting the smallholder at the centre.”

The cocoa industry’s current approach to sustainability has drawn criticism in recent months, as years of scattered actions have done little to improve the lives of farmers and prevent environmental degradation.

Under the new sustainability scheme – which will cost the company $1 billion over 10 years – all the cocoa it buys will be responsibly sourced by 2025, Mars said.

This means the cocoa will fit the company’s internal criteria – including full traceability to ensure it doesn’t contribute to deforestation – and carry a stamp of approval from a third-party verifier.

Mars had previously committed to buying 100 percent certified cocoa by 2020. However, the company is now looking to move “beyond certification”, which has not delivered the impact the company had hoped for, according to Ament.

“Certification isn’t enough,” he said. “Our belief is that we need to set more demanding standards than certification sets today.”

Currently, 50 percent of the cocoa that Mars buys is certified by schemes such as Rainforest Alliance and Fairtrade. Mars said it will maintain these volumes and potentially increase them if it sees improvements in the schemes’ standards.

Certification – designed to ensure more ethical practices and better earnings – has also been widely criticised as doing little to improve the lives of farmers, as the premiums they receive under the biggest of these schemes have been falling.

HIGHER PREMIUMS, GPS MAPPING

As part of its new scheme, Mars said it will work with certifiers and suppliers to “overhaul” its premium model, ensuring it pays more for responsibly sourced cocoa.

“We’ll see a combination of increased premiums overall and a bigger share of those premiums going to the farmers,” Ament said.

The scheme will also use GPS mapping to ensure none of the cocoa it sources is coming from protected forests. Much of the surge in production in West Africa has come from the encroachment of cocoa into protected areas.

Mars also plans to work with certifiers and suppliers to tackle hazardous child labour on plantations through community monitoring and intervention schemes.

However, the company said it recognises that the voluntary nature of such programmes – coupled with limited access to schooling – poses a challenge. It aims to work with governments to drive investments in infrastructure and to provide communities with an alternative to child labour.

The company’s new strategy also involves measures aimed at ensuring long-term sustainability, which will be rolled out across 75,000 farming families and suppliers. These will aim to boost productivity, help producers diversify crops and improve access to finance.

“We’re convinced that these farmers need a broader source of income to ensure that they have a resilient model, with income spread throughout the year rather than just two peak seasons of cocoa,” Ament said.

Some critics have accused productivity schemes of contributing to overproduction, with Ivory Coast this year halting the distribution of higher-yielding seed varieties and other advanced tools.

However, Ament said Mars is seeking to collaborate with governments and stakeholders to ensure productivity increases do not have a negative impact on supply and price.

Reporting by Ana Ionova; Editing by Dale Hudson