Kenya at the Crossroads Again

I received today my very own copy of African Socialism and its Application to Planning in Kenya (sometimes referred to as Sessional Paper Number 10). No 10 was obtained at the princely sum of 55 shillings, up from 50 shillings, and the day passed quickly reading it and other little gems from that time frame. One of the relevant articles was a critique, written by Barak H Obama senior, of that Sessional Paper. Obama really tore into not only the content of the paper but the ideology of its authors. Both of the papers in question were written in 1965, and the absorbing thing about the ideas and writing of that time is how relevant they are today. The depressing thing is that not only have we moved more in a circle than a straight line over the past four decades, we have probably in some ways decayed instead of developed….

Overall the first thing that struck me when reading these gems was that we sometimes mistakenly think that the ideas of our time and era are original, and that people who came before us have not agonized about some of the same issues we presently face. In all these pieces I saw a lot of the idealism and intellectual rigor we claim to lack in our public discourse; in some of the initial thinking, in particular of Number 10, we see some of the seeds that have germinated to bring us to our present crossroads.

Crossroads?
In many ways, Kenya in 2008 is precisely where we were as recently as 2003, and again in 1978, and as far back as 1964-65. The crossroads are an opportunity to pause, think and question both the direction we are going and the methods we are using to get there. At independence this was clear, and the Sessional Paper captures so much of the mood and clarity of thought that we would do very well to go back to and re-absorb. What is it to be a modern African state as separate from anything else, and what constitutes our core values and their interpretation in the modern state? Kenya at independence had to rethink what it meant to be a government of settler elite and instead manage its resources for the use and benefit of all.

Sometime soon after the death of President Kenyatta in 1978, I remember reading a foreign article about President Moi’s reception in Washington DC, where he was received as the new face of Kenya who could reform and take us into a new era of development. A change that would allow a rethink of the Governance structure from what had become a very narrowly managed system for an elite around the Presidency. The article, and it surprised me even at the time, went on to speak about the corruption and graft that had characterized the Kenyatta regime and the freshness and new thinking that Moi potentially could bring. The new thinking was about changing the mode of Governance, creating greater opportunities for people outside the clique around the Presidency to create value, very similar to what we speak about today or when Narc first took power in 2003.

The recent events of the coalition government in 2008 has brought this thinking a little bit clearer to me, that we received independence but have not done away with our colonial DNA of Governance. The past 44-odd years have seen the public sector used as a vehicle to maintain the elite. The political arena with a powerful presidency became the driving force behind everything in the country, especially business; the presidency and the influential people around it represent the largest business interests in the country. Today, Vision 2030 speaks of a formal sector of no more than 25 percent of the economy that is in the sphere of government regulation and processes. That may be an expansion from the 10 percent or less at independence, but it’s still a fraction of the responsibility of Government that purports to serve its citizenry.

It seems our government continues to serve the interests of a few, instead of of the many…regardless of color or tribe…

The Opportunity
Sessional Paper number 10 really captures in my mind the hope that government could be a custodian of the balance between growth and equality in the country. The government should be a halfway house between the competing forces of the market and the clamor for the nationalization and re-distribution for the poor. The government could use its policy and intervention to mould market forces to build for the common good, as was inherent in our traditional structures. A number of comments on resource use were made in No. 10 that we are still discussing today, about developing a common purpose and goal: that using offshore banks for the majority of one’s savings, leaving land idle and undeveloped, and conspicuous consumption are all examples of activities that may not be in the national interest, whose excesses call for policies of restraint.

The opportunity then, as today, was to close the gap between those who have and have not by creating vehicles and tools that make equality of opportunity a reality. Number 10 recognized the importance of individualism and rights to property, but also the fact that access to resources was not equal and required more public sector intervention to develop skills and, most importantly, equalize opportunity.

Today, we seem very much at the same point we were at in 1965; we have elites from 44 years of independence but at the bell curve of our population the statistics are the same: subsistence farming with little or no saving for the majority. The large change has been urbanization of rural people into slum areas that have no central sewage, water system, power supply or basic element of planning. In many respects these slum conditions pale in comparison to the quality of rural life available at the time of independence. The country is still divided into two Kenyas: one of hope, progress and opportunity, while the other survives in conditions equivalent to medieval Europe. In many respects our problems are greater and in sharper focus today than at independence.

The Trap
Obama senior’s critique of Session 10 was scathing and perhaps ill advised for the time, and expounded a very leftist view of the world. I am not concerned with the ideological debate, or according to him the absence of it, in Number 10’s deliberation, or his reference to more communal holdings. More relevant are his comments relating to development, productivity and use of our skilled resource. Obama senior’s most powerful comments were to accuse the administration of not understanding or valuing its own resources. I found this amazing.

Obama said the problem with government was that it insisted on Africanization, with no value judgment on the quality of persons who are given positions. Obama made reference to the fact that the few African people in commercial positions in the (then almost entirely white and Asian) private sector were in relatively low value PR positions and the like, not substantive roles like today, and usually for rent-seeking; they were of no real value to the organization. Obama’s point was that few qualified African were valued. Even the Government’s interest was more in education and increased volume of training, without ever recognizing the value of people as they were.

The core of the comment relates very much to the question of whether we see labour and people within our country as specialized, unique and of individual, or as a generic mass of whom we can tick off literacy and education statistics but are unable to speak of skill gaps and competencies. This failure to see value in labour was perhaps the beginning of the development of a culture of rent-seeking that permeated the late 60s and 70s.

Obama also made a comment about land use and productivity with challenges about how the mass of people were going to survive on smallholder plots. Obama mentioned the lack of planning for economic growth to absorb the increased labour market that would surely arise from a growing population. He spoke clearly about the need for us to think about ways to develop infrastructure and urban areas to meet the new demands that the population would put on the government, to create a integrated nation of producers and consumers. Obama seemed to see ahead of his time to the crisis of slums, of low smallholder productivity, and of high unemployment, like a sage.

In a small way, Obama senior was a competitor guru looking for advantage based on inherent value. We need more of this thinking, today and in the future, so that the core of our success will be based on our inherent ability to see value and get others to recognize it: simply put, having things that other countries want.

Decade of Development or Decay…
The 60s and 70s are sometime referred to as our development decades, and they might have been, but we’ll never know for sure. The reason for this uncertainty is that Kenya’s economic management policy at the time was focused on local industries. In 1965, when Sessional Paper number 10 was written, there were few controls or restrictions; one could withdraw foreign exchange and open business with little central or municipal licensing.

The idea, brought out in No. 10, of controlling all resources and skillfully managing them for posterity,gave rise to a raft of legislated controls on foreign exchange and licenses. The rationale meant that Government could think of any business idea, find a partner and allocate land and money, while creating an environment that would ensure success. In this way, Pan Paper was created out of a casual meeting between a senior Government official and investor, as were the Kenyan divisions of Del Monte, General Motors, and a host of manufacturing businesses at the times…What became off this was an Alice in Wonderland approach to the world – if you could think it, it was possible. No one had any idea of how competitive these businesses were in the global economy, and only the most severe incompetence was punished by the loss of a guaranteed market.

This all transpired amid the world’s first oil shock and commodity boom; therefore our agriculture-based economy was given an added boost, especially the coffee sector. So it is very difficult to say how real and of what value the growth of that period was; its underlying competitiveness was just too effectively masked.

The absolute power of government over the business environment, combined with absolute political power of the presidency, combined to make a toxic mix that created ample opportunity for manipulation of state machinery for incredible personal gain. I feel no need to go into this in much detail; the wealth of all previous political and civil service elite is quite self evident in Kenya today.

Liberalization and Market Forces, Competitiveness and the Future…
The 80s and 90s finally brought a verdict on whether we were globally competitive or not. The answer for Kenya was, sadly, no. The proof was a growth rate that plummeted all the way down to 0.5 percent per annum in the new millennium. The Moi versus Kenyatta question of which regime was more corrupt misses the point; the facts point to a consistently hampered environment that required better use of skills and recognition of value due to external factors, and a regime that refused to change even when it switched leaders.

Today, we have an economy that has grown by over 6 percent but whose numbers, while demonstrating better management, rely heavily on fickle tourism and real estate. The key question remains how can we produce things (products or service) better than any other country, and get a greater percentage of our citizens involved? The answer is important because, as a friend of mine says, “people and countries get rich by selling things to other people and countries!”

The real message of No. 10 and Obama senior is as alive today as it was then: what does our Government mean to do for its citizens to deliver a better future? It has to do that by seeing with vision, and planning the use of resources competitively for the future of all…and not a few…

What will Kenya do this time at the crossroads?

James Kibera is a Nairobi-based businessman, who really should not be so foolish as to write these things and be out making money.