Kenya’s Milk Consumption is the Highest in the Developing World

Last year the French company Danone (maker of Activia yogurt) bought a 40% stake in the Kenyan dairy firm Brookside, a sign of the growing importance of the dairy market in the wider eastern Africa region. But the story doesn’t end with the big household names. Smallholder farmers are also getting a piece of the dairy bonanza in Kenya:

HT Sarora Dairies

On a related note, here is how a company in China is helping industrialize the country’s dairy sector:

A milk scandal erupted in China in 2008 when the industrial chemical melamine was found in dairy products nationwide. While many Chinese dairy companies faced huge losses or bankruptcy as a result, one small firm, Dairy United, accelerated its development. Dairy United is one of the fastest-growing and most innovative Chinese dairy producers, one that features an unusual organizational structure and business model. Unlike most corporate and cooperative dairies that purchase cows on the market, Dairy United leases dairy cows from local farmers, giving it access to its primary asset without a large up-front investment, and letting the firm grow its dairy herds with newborn heifers. In return, farmers receive fixed payments biannually, but relinquish control rights and residual claims to the firm. Thus, Dairy United’s leasing is helping transform Chinese milk production from a backyard, labor-intensive activity to a more industrialized mode of farming. The case is particularly interesting for understanding applications of agency theory in agribusiness.

That is according to a new paper in the American Journal of Agricultural Economics (which I hope chaps at the Ministry of Agriculture in Nairobi subscribe to).

Kenyatta to burn 15 tonnes of ivory in an admission of failure to end poaching

The Daily Nation reports:

President Uhuru Kenyatta will Tuesday become the third president in Kenya’s history to set ablaze 15 tonnes of elephant ivory to mark the World Wildlife Day.

I hope this doesn’t become a thing that every president does over the duration of their tenure (well, by definition, if it is we’ll eventually run out of elephants).

Also, burning 15 tonnes of ivory sounds like such a waste. Can’t we just pile them up as a monument? A reminder each year – as the pile grows – of our collective failure to stop poaching? Just a thought.

Happy Wangari Maathai Day. Happy Wildlife Day.

Fact: 15 tonnes of ivory is worth about USD 28.3m in China.

Rating Kenya’s Presidents

Jomo Kenyatta’s regime was corrupt, illiberal and competent. Moi’s was corrupt, illiberal and mediocre. Kibaki’s was corrupt, liberal and competent. So, Moi scores zero out of three. Jomo scores one out of three. Kibaki scores two out of three. Now it adds up!

Jubilee’s [Uhuru Kenyatta] stock has fallen not just because it is seen as corrupt, but because it comes across as also illiberal and incompetent. Like Moi’s regime, it scores zero out of three.

….. Which is more harmful to society, mediocrity or corruption? Mediocrity is by definition below average. It stands to reason that all other things equal, mediocrity is more costly than corruption.

It goes without saying that a corrupt mediocracy is even more deleterious. When mediocre rulers are also corrupt even their corruption is mediocre. Because they are unable to generate sufficient returns, they eat into the capital. That’s what the decay of our infrastructure during Moi was — they ate the capital.

What’s more, what mediocre corrupt leaders steal they squander. Mobutu’s billions have never been traced.

That is the ever-insightful Kenyan economist David Ndii writing in the Daily Nation.

And of course Kibaki was the best president Kenya ever had. He went to Mang’u High School (along with many other key people in his government).

But on a more serious note, can Kenyatta’s administration be redeemed?

I think so. Part of the problem has been the total breakdown of constructive communication between the moderate elements in Kenyan society and State House. The ensuing siege mentality at State House has left the president open for capture by the thuggish elements that are rapidly criminalizing the Kenyan state. But progressive Kenyans need not concede the presidency to these corrupt, incompetent and illiberal characters. There is still room for constructive engagement.

Unlike Moi President Kenyatta appears to have an instinct to delegate (some say he is clueless at Government). The challenge is how to make sure he delegates to the right people.

Graph of the week

Over the last two decades there has been a remarkable shift in the composition of domestic government debt in Kenya, with long-term debt instruments (bonds) increasingly preferred to short-term debt (T-Bills).

The financial market in Nairobi is telling us a thing or two about creditors’ perceived time horizon of the Kenyan government; and Treasury’s capacity for credible commitment.

Screen Shot 2015-02-05 at 8.46.08 AM

Source: The World Bank

For curious readers, I would argue that the explanation for this structural change (especially after 2003) is more Stasavage than North and Weingast.

The ICC’s case against Uhuru Kenyatta

Following the collapse of the case against President Uhuru Kenyatta of Kenya, ICC prosecutor Fatou Bensouda made public her case against Mr. Kenyatta for his alleged role in the 2007-08 post-election violence in Kenya. More than 1300 people died and 300,000 were displaced.

You can find the public [redacted] version of the prosecution pre-trial brief here.

UPDATE: And here is the defence’s response.

Most read posts in 2014

Here are the top posts in 2014

1. Corruption under apartheid South Africa: This post was top partly because of the 2014 South African elections. More on the legacies of apartheid era corruption and rent-seeking in South Africa here.

2. Kenya Security Laws (Amendment) Bill 2014: This bill (now an Act of Parliament) is further evidence of Uhuru Kenyatta’s autocratic tendencies. I personally don’t think that he is an incarnation of Moi or other dictators of years gone. Rather, Mr. Kenyatta is a poor administrator who likes taking shortcuts to get quick results. As I argued in a related post, the Security Laws (Amendment) Act 2014 could potentially severely limit civil liberties in Kenya.

3. Did European Colonialism Benefit Africans? The popularity of this post is perhaps a reminder that more research is needed on the long-run effects of colonialism not just in Africa but in other formerly colonized places as well. So far all the literature tells us is that colonialism was bad, but that the Western institutions that Europeans spread around the globe are good. More recently we’ve seen evidence that pre-colonial institutions in the colonies were pretty resilient in the face of colonial intrusion; and have had lasting effects (also remember that the duration and intensity of colonialism varied widely across the globe). One avenue of research that I have been exploring is how pre-colonial institutions interacted with colonial administrations, and how this shaped the institutions that emerged out of the independence wave of the early 1960s. More on this in the new year.

4. Why Raila Odinga Lost: A sizable proportion of Kenyans still believe that Odinga was robbed in the March 2013 election in Kenya. I disagree. In my own projections on this blog – merging disaggregated opinion polls with historical district turnout rates (perks of having a case with tight ethnic voting) – I found Mr. Kenyatta to be ahead of Mr. Odinga by about 740,000 votes, or 7.2 percentage points (which was close to the final official figure of 6.7% difference between the two).

I don’t think that Kenyatta won in the first round, but do believe that we would have trounced Odinga in a runoff anyway. Which is why I have never come to terms with the unanimous Supreme Court decision granting Kenyatta victory on the basis of less than 9000 votes out of 12.3 million cast.

5. Understanding Uganda’s Military Adventurism Under Museveni: General President Museveni has managed to create an image of himself as the anti-terror hatchet man in the wider horn of Africa region. Ugandan troops are the backbone of the AU mission in Somalia (AMISOM). Since his triumphant entry into Kampala in 1986 Museveni has also been involved in conflicts in Rwanda, the DRC, Sudan, C.A.R, and more recently South Sudan. Because of the degree of militarization of the Ugandan state and recent public displays of intra-elite friction, I think Uganda will continue to inch up in the coup sweepstakes ahead of the 2016 election.

Kenya Security Laws (Amendment) Act, 2014

President Uhuru Kenyatta assented to the Security Laws (Amendment) Act, 2014 (archived pdf here). Despite widespread opposition from a large section of the Kenyan public, amendments therein are now the law of the land. The law itself is a mixed bag. There are some good parts that are meant to streamline the criminal justice system. But there are other parts that will certainly be abused by politicians and over-eager security agents, and could lead to a drastic reduction of civil liberties in Kenya.

This is how the bill was passed:

Members of Parliament and Sergeants-at-Arms guard House Speaker Justin Muturi as he reads the motion to pass to the bill.

Civil Society groups in Kenya, and a section of Members of Parliament, have vowed to challenge the constitutionality of the Act in court.

Will the challenge succeed? The simple answer is I don’t know. The Kenyan Supreme Court leans to the right, and is likely to defer to the executive (and its allies in the legislature) on matters related to security. Plus my bet is that if you polled the law a good chunk of Kenyans would support it. It targets “terrorists” and “criminals.” The mainstream churches in Kenya have also come out in strong support, in no small part because suspected terrorists have made a habit of attacking packed churches along the Kenyan coast.

The judicial review process is unlikely to set aside the entire statute. The petitioners will be better served to focus on key clauses that are unconstitutional and ask the judges to strike those out. But I should reiterate that the judges are likely to defer to Parliament and the executive on this one.

From a legislative studies perspective, what is worrying is that in order to get the law passed  State House essentially told the National Assembly, “Trust me. I need these powers to secure Kenyan lives and property. And I will not abuse them. Trust me.” And then Parliament capitulated. There was no debate over the State’s total failure to use existing laws to prevent and/or deter crime. Or the corruption and gross ineptitude that ails the security sector. Instead the executive was rewarded with even more power, secrecy, and ability to silence criticism from the media. All open to cynical abuse.

What Parliament forgot is that that there are no good politicians; only constrained ones. And that if unchecked anyone and everyone will abuse power. It doesn’t matter whether they are Pol Pot or the Pope.

Kenya Security Laws (Amendment) Bill 2014

Here is a pdf copy of the Kenya Security Laws (Amendment) Bill 2014.

The proposed amendments will, broadly speaking, curtail the freedom of speech and association, and limit media coverage of security related stories. They will also cut into the independence of the Kenya Police Service by granting the president the powers to appoint and fire the Inspector General of Police. Presently an independent commission picks a list of candidates from which the president chooses the IG. Lastly, the law promises to resurrect the position of the all powerful internal security minister with broad discretionary powers.

All in the name of keeping Kenyans safe from foreign terrorists, and themselves.

There are a few good things in the proposed law, including the sections that clarify the roles of the office of the Attorney General and the Director of Public Prosecutions (DPP); and those that limit judges’ discretion in the handling of cases involving terror suspects.

Despite the dubious constitutionality of some clauses in the bill, I bet a majority of Kenyans would support it in a poll. For that we have to thank the recent uptick in terror attacks and fatal communal conflicts. This year alone hundreds of Kenyans have died from such attacks.

That said, if you ask me the problem of insecurity in Kenya is not simply a result of restrictive laws that limit the government’s ability to pursue and prosecute criminals. It is a problem of a corrupt police force that takes bribes from petty criminals, poachers, drug dealers, and terrorists, alike. It is a problem of an increasingly unaccountable intelligence and military securocracy that is both fighting jihadists in Somalia and trafficking in charcoal and other goods, the proceeds of which benefit the same jihadists. It is a problem of an ineffectual intelligence service that instead of diligently doing its homework prefers to carry water for foreign agencies, regardless of the domestic consequences.

And finally, it is a problem of an elite political class that wants to have its cake and eat it. They want a criminal justice system that protects those who steal from public coffers but punishes chicken thieves. A system that protects poachers and drug dealers but nabs terrorists and armed robbers. At some point something will have to give.

Iko shida.

This is huge >> ICC drops case against Uhuru Kenyatta

The ICC prosecutor has dropped the charges against President Uhuru Kenyatta, citing the lack of evidence due to non-cooperation by the Kenyan government. Mr. Kenyatta stood accused of playing a significant role in the 2007-08 post-election violence in Kenya in which at least 1300 people died and over 300,000 were displaced.

Four quick observations.

  • The Kenyan case was always going to be a tough one for the ICC. Kenya is neither the DRC nor Sudan. As soon as Kenyatta got elected Brussels, London, and Washington made it clear that they would not sacrifice their economic and geopolitical interests in the wider eastern Africa region on the alter of justice. This gave Mr. Kenyatta latitude to attack the legitimacy and legality of the ICC case against him both through the African Union (AU) and Kenyan diplomatic channels. Back in Kenya witnesses disappeared or withdrew their testimonies. The Office of the Prosecutor repeatedly said that the Kenyan state refused to hand over evidence relevant to the Kenyatta case. All this while Western embassies remained quiet about the case (for fear of “losing” Kenya to China).
  • This leads me to conclude that in a perverse way, the collapse of the Kenyatta case might actually be good for the ICC. The court (and OTP) can save face by arguing that they had the authority to prosecute the case but lacked cooperation from the Kenyan state. Now, the biggest challenge for everyone involved is how to ensure that this does not get interpreted as blanket immunity for all sitting presidents who are suspected of committing atrocities against their citizens. The deterrent effect of the ICC should be preserved.
  • The collapse of the case has interesting implications for Kenya’s domestic politics. It is common knowledge that the political union between President Kenyatta and Deputy President Ruto ahead of the 2013 election was primarily driven by their ICC cases. Mr. Kenyatta’s case has collapsed. Mr. Ruto’s is ongoing. This will diminish Mr. Ruto’s bargaining power in the alliance. It will also demand for Kenyatta’s allies to walk a tight rope and ensure that they do not signal to Ruto’s supporters that they no longer need them now that Kenyatta is off the hook. Ruto’s bloc, URP, has the second largest number of MPs in the National Assembly. This will give him leverage of some sort, even as his case goes on. Simply stated, without the ICC bond, the union between Kenyatta and Ruto will become more transactional. This means that mistakes will be made, and each side will have to try hard to ensure that disagreements over specific issues do not get blown out of proportion. Knowing Kenyan MPs, this will be a tall order.
  • Lastly, now that the ICC is behind him President Kenyatta might actually seriously tackle the issue of insecurity in Kenya. It is widely known that since he took office his approach to security matters has been informed by the desire to rid his administration of anyone who might have been sympathetic to the ICC. The former chief of intelligence (who may have played a role in “fixing” both Kenyatta and Ruto) and other senior officials who may have testified against him were let go. It took the slaughter of more than 450 Kenyans at the hands of terrorists and armed bandits over the last 18 months for the president to fire the chief of Police and the Cabinet Secretary in charge of internal security. One can only hope that now Kenyans will get a more responsive security sector.

What does this mean for reconciliation in Kenya? Not much. 2007-08 shattered the myth of Kenya as a peaceful oasis in an otherwise volatile region. Kenyans are yet to comprehensively deal with the shock of seeing what neighbors could do to one another. The preferred MO has been to sweep things under the rug. That was the logic of the Kenyatta-Ruto alliance (the land issues that erupted in clashes between their respective constituencies have not been resolved). It is the same logic that drove the peace-at-all-costs campaign that stifled open discussion of contentious national issues ahead of the 2013 election.

For better or worse, Kenyans are desperate to move on past 2007-08. But the weight of historical injustices, inequalities, and the continued failure to address them are constant reminders that 2007-08 might happen again.

What’s African about unalloyed misogyny?

The just passed marriage bill is unambiguously the most offensive idea to come out of the 11th Parliament yet. According to the BBC:

MP Samuel Chepkong’a, who proposed the amendment, said that when a woman got married under customary law, she understood that the marriage was open to polygamy, so no consultation was necessary, Kenya’s Daily Nation newspaper reports.

Mohammed Junet, an MP representing a constituency from the western Nyanza province, agreed.

“When you marry an African woman, she must know the second one is on the way and a third wife… this is Africa,”

This is Grade A horse manure.

President Kenyatta should veto this bill. And the group of Kenyan MPs who think that disempowering women is a smart idea are advised to watch the video below of President Kibaki at a press conference ostensibly to confirm to Kenyans that he has ONLY ONE WIFE, following rumors to the contrary [More here].

Also, Mr. Kenyatta should require that before he assents to the bill it must expressly forbid dabbling in both civil and “customary” marriages because the resultant legal arbitrage only benefits men. SOMEONE TELL ME, WHY DO WE NEED A DUAL SYSTEM ANYWAY??? A woman entering a civil marriage should have the guarantee that it will always remain so, with stiff penalties for men who violate the contract. The provisions for Muslims have always been clear and should remain so.

And just for good measure, they should also hear what Chimanda has to say about gender relations:

More on the unbelievably sophomoric debate on this matter in the National Assembly here.