Kenya’s Love Story with Aid: Can we Break Up?

Eric Kinaga
Sep 13, 2018 · 4 min read

We are heading south so fast as a nation, we can’t even stop to catch some air. Every waking day now feels like a brutal insertion of a pin into a fresh wound. Kenya is hurting economically. But how did we get here?

Looking at the history of aid, it is now clear that the balances, from the word go were tipped to Africa’s disadvantage. The creation of Bretton Woods institutions such as the World Bank and IMF, was primarily aimed at injecting life into collapsing western economies such as Great Britain, France, Italy, and Germany among others soon after the Second World War, in what has now come to famously be known as the Marshall Plan. The 50s came and Africa became a target recipient of aid, which was used by its previous colonial masters to maintain their grip on these emerging economies. Aid also became the perfect tool to buy political support by the US during the Cold War. It mattered less whether the ruling African elite were accountable. Support in the form of bilateral aid came pouring in and created monsters like Congo’s Mobutu Sese Seko, Uganda’s Idi Amin, Ethiopia’s Haile Mengistu and CAR’s Jean Bokassa.

The 80s came with SAPs aimed at economic stabilization, but failed us. Then came the 90s when the question of good governance emerged. Despite pumping billions of US dollars to the continent, Africa had maintained a steady economic decline, runaway corruption and high poverty levels. In a bid to find an alibi, the West blamed this on weak political systems and corrupt leaders. The clamor for Multipartism across the continent was activated and Kenya was a pacesetter. This culminated in the promulgation of a new constitution and the establishment of independent offices and commissions.

Sadly, it is hard to write the story of Africa, without a mention of her debts.

Besides a wider democratic space (which is now shrinking), Kenya has little to show for the huge amounts of aid poured to us over the last four decades. But it’s not coincidental. It has always been deliberate. Much of this aid had little regard for development outcomes, and more about the establishment of a client regime. Big loans at first came from the West but now we have much bigger ones coming in from China (accounting for 72 per cent of our 2.5 trillion foreign debt). Countries like Singapore, Hong Kong and South Korea that started out with us at independence are now proving that industrialization can do a round trip across the globe, before aid can put its boots on.

So where do we go from here?

It has sensationally been claimed that countries, just like individuals, can’t grow without debts. However, proponents of this claim conveniently leave out the importance of securing and sustaining our cash flows which in the case of governments, go into the provision of essential services. This is why, as a country we need to start questioning the value proposition of development projects we undertake. If they can’t help to organically raise Kenyans out of poverty, increase their per capita income or boost the sectors that matter to us (Agriculture, Manufacturing mostly), then we need not borrow to construct them. And there are endless opportunities in these sectors, with huge potentials of generating employment for many deserving yet jobless Kenyans. Thailand has already shown us the way, with a 0.7 per cent unemployment rate as of 2017. Simply put, everyone who can and wants to work in Thailand, has work to do. And many of them are in the informal sector.

The Kenyan government, more than anything else, must find ways of adding value in our sectors. This includes protecting our farmers from unfair competition, building industries that will help us improve our balance of payment from net importers to exporters and create a conducive business environment for young people starting out their businesses (and not AGPO. It’s a scam). Last but not least, the stealing from public coffers must stop. It is past and present corruption that has now come back to haunt us. We have a gaping budget deficit that the CS for National Treasury, Henry Rotich hopes to bridge by imposing VAT on petroleum products. And while I appreciate the value of domestic resource mobilization as opposed to running a debt-financed economy, Treasury and Parliament now must be creative in how they mobilize for resources, what we allocate it to, and how we track its spending. Otherwise citizens will become averse to the paying of taxes, if they don’t see how they are benefitting from them. And this is already starting to happen.

The alternative is, of course, to brace ourselves for 21st-century slavery by China because that’s where we’re headed if we don’t stop to re-examine this dalliance.

Eric Kinaga

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