Just How Bad is Public Debt in Africa?

Well, public debt in African states is much higher if you take into account their revenue mobilization capacities. The bigger the informal sector, the lower the debt/revenues ratio.

Consider the case of Nigeria (from the FT):

Nigeria’s accumulated government debt is just 18.6 per cent of its annual economic output, one of the lowest levels in the world, implying that its debt burden is more than manageable. But is this a fair reflection of reality?

Using a different metric, the Nigerian government’s gross debt is 320 per cent of its annual revenues, according to figures from Fitch Ratings, one of the highest figures in the world and comfortably above the median of 196 per cent for countries in Africa and the Middle East that are rated by Fitch.

More on this here.

 

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On North Korea’s Lucrative Relationship With African States

A number of African countries have close ties to North Korea. And it is for the very same reasons that these states have (or had) ties with Cuba, China, and USSR/Russia:

Namibian officials describe a different North Korea — a longtime ally, a partner in development and an affordable contractor. Since the 1960s, when North Korea began providing support for African nations during their independence struggles with European colonial powers, the regime has fostered political ties on the continent that have turned into commercial relationships.

Recall that it is China that was willing to come to the aid of landlocked Zambia after apartheid South Africa and apartheid-lite Southern Rhodesia threatened the country’s trade links on account of its support for nationalists from both countries. The USSR and Cuba were also vital allies of African nationalist liberation movements at a time when the West was mired in doublespeak over decolonization and racial equality on the Continent. Cuba, in particular, committed blood and treasure in the liberation of Angola and Southwest Africa (Namibia).

Nelson Mandela vowed never to forget friends that aided the ANC against apartheid:

All to say that China, Russia, Cuba, and North Korea are not merely using African states. It has always been a game played on the basis of mutual interests, with the distribution of benefits dictated by the prevailing balance of bargaining power.

Making Sense of Competing Visions of Kenya in the Jubilee & NASA Manifestos

This is a longer version of my column in the Standard this week.

This week the leading political blocs in the upcoming General Election released their respective manifestos. Jubilee sought to convince Kenyans that it needs another term in office to finish the job it began in 2013. The National Super Alliance Coalition (NASA) presented an agenda for the full implementation of the 2010 Constitution, focusing on equity and inclusivity. Both documents present competing visions of where we are as a country, and where we ought to go.

On one hand, Jubilee which sees the country’s problems as rooted in poor infrastructure and a lousy business environment. Its vision of government intervention in the economy is thus driven by the need to facilitate private investment (mostly through crony capitalism, but also through streamlining of the regulatory environment).

jubilee

But on the other hand is NASA, whose manifesto suggests a firm belief that the ambitious 2010 constitution has yet to be fully implemented; and that the country still requires structural transformation in order to guarantee equitable sharing of national resources, social inclusivity, and equality before the law and the government.

On a spatial left-right scaling, NASA’s manifesto is decidedly to the left of Jubilee. This is reflected in both the specifics in both manifestos and the choice of words in the documents. NASA (see image below) envisions a much bigger role for the government in the effort to transform Kenyan lives than does Jubilee (see above).

Both manifestos and visions for Kenya’s future have merits and demerits. Jubilee has a case to make for working with the country we have without re-litigating the political settlement of 2010 and its (partial) implementation since 2013. Restructuring society doesnasa not always yield the desired results, and often comes with instability. Their vision of doing their best to build infrastructure and letting hardworking Kenyans do the rest makes sense if one believes that you go to battle with the army you have. Their proposed vision of Kenya is grounded in the idea that a rising tide, even if marked by high levels of inequality, lifts all boats. Simply stated, it is a vision that prizes ends rather than means.

NASA’s vision of structural transformation is also valid in its own right. It prizes means and ends. Their plan for Kenya is informed by the idea that no society can continue to cohere if a section of citizens have deep feelings of structural inequality and discrimination. That we can have all the roads, water and sanitation, and bridges we need, but still flounder if a sizable proportion of Kenyans still feel like second class citizens in their own land. They also contend that inequalities today will breed inequalities tomorrow, and that a future in which only a small segment of the nation has access to the most lucrative economic opportunities and the best government services – simply on account of the language they happen to speak – is one destined to bring conflict. In a nutshell, NASA’s is a nation and state building manifesto that promises to not only increase the number of sufurias in Kenyan kitchens, but also create a new kind of nation-state devoid of the “culture of madharau.”

A priori, it is hard to say which vision fits the country best at this point in our history. Kenyans who have seen their lives improve over the last four years will most certainly want to eschew any radical changes — this is true, despite recent worrying headline economic numbers. Those who have seen their economic situation stagnate or worsen want change now. Looking at the numbers, there is ample evidence in support of either argument.

This is why, unlike some partisan observers, I see no reason to worry that the world would end if either Jubilee or NASA wins. The truth of the matter is that life will go on as before — with messy and contested politics at every turn, and high levels of economic inequality.

It is extremely hard to change or ignore social forces.

If Jubilee wins, it will be hard to continue ignoring issues of equity in perpetuity. Eventually, even diehard Jubilee supporters will realize that the crumbs that fall off the table are a raw deal. In the same vein, a NASA win will not necessarily produce a radical transformation of the Kenyan state. Once in power, the coalition’s leadership will most certainly be disciplined by our unwieldy political economy dominated by so-called cartels and our general structural conservatism.

As a student of political development, all I can say is that either path will lead to further consolidation of our political economy — either through further entrenchment of a hierarchical order (under Jubilee); or the widening of the economic upper class (under NASA).

Below is a list of what I consider to be the highlights of both manifestos. Consistent with the claims above, the Jubilee manifesto has specifics on many of its promises, while NASA’s largely sets out frameworks within which it will seek to transform Kenyan lives and the nation-state.

Jubilee:

  1. Investments in universal secondary education and 100% transition from primary to secondary school
  2. Completion of 57 large-scale dam projects to improve water access and irrigation
  3. Setting aside 1% of R&D funds to document and disseminate lessons and best practices in policymaking from the 47 counties
  4. Increase of electricity access to up to 100% of Kenyan households (from current ~53%)
  5. Complete several ongoing and planned transport and energy infrastructure projects (six-lane highway from Nairobi to Mombasa, Isiolo-Lamu road, SGR to Malaba etc) 

NASA:

  1. An ambitious nation and state building framework to guarantee equity and inclusivity
  2. Strengthening of the devolved system of government (including in areas of education, health, and agriculture)
  3. Investments in improving agricultural productivity (including for smallholder farmers)
  4. Expansion of social protection for households with orphans and vulnerable children
  5. Implementation of regionalized (cross-country) development plans