Do you need a reason to visit Kenya?

Kenya’s economy is growing at 5.9%. It is a frontier economy of 46 million with lots of opportunities for investment in sectors as diverse as tech, infrastructure, agribusiness, and light manufacturing. Kenya is also a gateway to the wider Eastern Africa region, with a market of about 120 million.

But if you are not a potential investor and just want to visit, here are some pictures to help you along…

Facebook founder Mark Zuckerberg visited Nairobi this week for business. He also found time to visit Lake Naivasha, a quick two hour “safari lite” destination to the northwest of Nairobi. The best thing about Nairobi is that it is the only city in the world with a national park (not a zoo) within city limits. Zuckerberg could have gone for a game drive in Nairobi, if he wanted to. The pictures were posted on Zuckerberg’s Facebook account.

Now go ahead and book those tickets.

Was the Election in Gabon rigged?

Here is a potential answer to this question:

Thanks to the last minute Haut Ogooué results, Mr. Bongo was able to win by a margin of 5,594 votes, securing 49.8% of the vote to Mr. Jean Ping’s 48.2%. Opposition representatives refused to sign papers validating the results.

According to the electoral commission, 99.9% of Haut Ogooué’s population casted their votes at the ballot boxes, which is a slight anomaly to the rest of the country where the average turnout was 59%.

A career diplomat, Ping, who previously served as the chairman of the African Union Commission, disputes the result. “To use one province to impose a coup in the country could have serious consequences for national unity,” Ping said.

Ping, of course, is the same guy who while at the AU Commission (2008-2012) turned a blind eye to instances of election fraud in several African states. It will be interesting to see where he turns to for help.

Meanwhile protesters burned down the Gabonese Parliament yesterday. Authorities then blocked the internet early Thursday.

The Bongo family has ruled Gabon since 1967. Ali Bongo became president in 2009 following the death of his father Omar Bongo who was president for a staggering 42 years.

Nigeria has a shockingly tiny government

These are figures from an IMF Article IV country report in April of this year:

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The one thing that jumped at me from this table was how little(as a share of total national output) the Nigerian public sector spends. The government barely takes in 10% of GDP in revenues; and spends between 11-12%. Also, for a country at its level of development (and with an economy of its size), Nigeria is weirdly debt free (relatively speaking).

You may be thinking that these figures must exclude state government expenditures — and you are wrong. The 11-12% figure is inclusive of state government expenditures.

In my view, this is a PFM smoking gun on the distortionary effects of oil dependence. Nigerian policymakers appear to be sated with the little revenue they are consuming (as a share of GDP) from the oil sector.

For a comparative perspective, take a look at Kenya’s numbers:

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The Kenyan government gobbles up about a fifth of GDP in revenues, and spends about a quarter. The Nigerian government only takes in a tenth of GPD and spends just a little over a tenth. In addition, the Kenyan government’s debt/GDP ratio is twice Nigeria’s.

General government spending as a share of GDP within the OECD ranges from 33.7% in Switzerland to 58.1 in Finland. The OCED debt/GDP ratio average is 90%.

Back in grad school I took Avner Greif’s economic history class in which he emphasized the importance of organizations for economic development. Societies, big and small, organize out of poverty — by building and maintaining socially-attuned institutions that lower transaction costs. The scope and intensity of organizational capacity therefore matters for economic development (For more see here). It takes a well ordered state.

And from these two tables, it is fair to say that the Nigerian state is underperforming relative to its organizational potential. Perhaps it’s time more people in Abuja started reading Alexander Gerschenkron (however dated this might be).

 

 

Workshop Fatigue: Residents of Kibera Demand Sitting Allowances to Attend NGO Meetings

The residents of Kibera, in Nairobi,  have a message for foreign aid groups in their community: if you want us to come hear what you have to say, you need to pay us.

So many non-governmental organizations (NGOs) have flooded this poor area that many locals have become disillusioned by the foreigners who say they want to help.

Inundated by invitations to go to meetings and trainings put on by NGOs, the  residents now seek compensation for their time. The handouts, known as “sitting allowances,” generally range from about $1 – $3 per hour, which can buy a fair amount here.

“Trust me, no one will go without the sitting allowance,” said Sharon Ogolla, 20, as she stands outside the hair salon she runs with her mother.

Asked whether most locals go to hear what the NGOs have to say, or just to collect the payment, Ogolla said, “Well, both, but mostly, honestly, to get the fee.”

For more see here. You should also read it for commentary on misguided foreign interventions.

H/T Laura Seay.

When Markets Discipline Politics

President Jacob Zuma continues to be in conflict with his own Finance Minister, Pravin Gordham, over fiscal policy (and propriety in the management of public finances). The markets trust the latter. The former has more power, including the coercive apparatus of South Africa’s administrative state. Having just presided over a disastrous outing for the ruling ANC in this month’s municipal elections, Zuma needs to create more policy wiggle room for his floundering administration. And Gordham’s commitment to fiscal discipline stands in the way. So far the markets’ reaction to Zuma’s machinations at the Finance Ministry have managed to discipline intra-ANC elite politics. But as Zuma gets closer to retirement (or being forced out) it is unclear how much he is willing to continue humoring the markets…

The revelation on Tuesday that Gordham may be forced out via (likely dubious) charges of improper conduct while he served as head of the South African Revenue Service sent the rand tumbling, again.

This is the third time the police unit, known as the Hawks, have questioned Gordhan. Earlier this year, just days before he was set to deliver a crucial budget speech, the Hawks demanded Gordhan answer written questions. Then in May, rumors of Gordhan’s imminent arrest sent the currency tumbling, just as ratings agencies were assessing South Africa. Gordhan was not arrested then, and went on lead South Africa’s recent economic recovery, assuring international investors of the country’s stability.

Screen Shot 2016-08-24 at 11.13.59 AMAnalysts believe Gordhan is the target of president Jacob Zuma and his political allies. The two are reported to be at loggerheads over the management of South Africa’s state-owned enterprises, especially the national carrier South African Airways. Gordhan’s office has delayed bailing out the embattled carrier until a new board is appointed (effectively removing those close to Zuma, according to reports). Gordhan’s office has also curbed spending on plans to build a new nuclear power plant.

Earlier this week, a cabinet briefing announced that Zuma himself would now directly oversee state-owned companies. Analysts say the move allows Zuma to maintain political power and protect his interests after historic losses in this month’s local government elections. Zuma’s office has denied that there is a rift between the president and the finance minister. According to reports, Gordhan is determined to resist pressure to resign

For more on this visit Quartz Africa:

The Secret to Autocratic Success (The Example of China)

This is from The Economist:

Even so, Mr Xi’s authority remains hemmed in. True, his position at the highest level looks secure. But among the next layer of the elite, he has surprisingly few backers. Victor Shih of the University of California, San Diego, has tracked the various job-related and personal connections between the 205 full members of the party’s Central Committee, which embodies the broader elite. The body rubber-stamps Mr Xi’s decisions (there have been no recent rumours of open dissent within it). But the president needs enthusiastic support, as well as just a show of hands, to get his policies—such as badly needed economic reforms—implemented. According to Mr Shih, the president’s faction accounts for just 6% of the group. That does not help.

Admittedly, this number should not be taken too literally: it is difficult to assign affiliations to many of the committee’s members. Doubtless, too, many members who are not in Mr Xi’s network support the president out of ambition or fear. Still, Mr Xi can rely on remarkably few loyal supporters in the Central Committee because he did not choose its members. They were selected at the same time he was chosen as party leader in 2012, a process overseen by the dominant figures of that period, Mr Hu and the long-retired Mr Jiang.

Most people who laud China’s autocratic success conveniently choose to ignore two important facts:

  1. That China’s rulers, at least since the late 1970s, have not been totally unaccountable. The country is a dictatorship by committee. And a large committee at that. It is not a personalist one man show.
  2. The the Chinese party-state works tirelessly to reduce the cost of compliance among its citizens — through conscious state building, coercion, and public services.

What this means is that in order to replicate China’s autocratic success, would be little Chinas must invest in both state capacity and intra-elite accountability (perhaps by building strong, institutionalized parties).

Absent this, what you are likely to get are mediocre petty tyrants running disorganized non-states with infant mortality rates straight out of the 16th century.

More on the heights of nations (Are Africans really getting shorter?)

The height study has received a lot of press in the last few days. But Frances Woolley warns against taking its conclusions wholesale:

There is no data at all for people born before 1916. The first 20 years of “sprouting up” are generated by assuming that the 1896 to 1916 period was characterized by the same kind of increase in height as later periods. The data for the people born just after 1916 comes from surveys carried out in 1998 or later – i.e. from measurements of the heights of people up to 80 years old. To estimate the average height, at age 18, of people born in 1918 by observing that cohort in 1998 when they are 80 years old involves some heroic assumptions – assumptions about shrinkage with age, survival rates, etc. It would make a lot more sense to choose a shorter time span for the analysis, and give results that involved a bit less guesswork.

Is this bad science? I would say yes. It’s bad science because it oversells the results. The article overstates both the amount of height data the research team has (it’s not a century, in many cases it’s more like 50 to 75 years, especially for women), and also how recent the data is (in most cases the data is not for the 1996 birth cohort, but rather for earlier birth cohorts). It’s bad science because it presents headline grabbing results – and makes them readily available to journalists – without attempting to convey, in ways that are easy for reporters to understand, the amount of uncertainty associated with those results. Are Latvian women tall? Yes. Are they the tallest in the world? We can’t know that for sure unless we know the margin of error associated with the estimates of Latvian, Dutch, and other groups’ heights. It’s hard to put a standard error around the results of complicated projections – but that’s an argument against making complicated projections, and disseminating them to reporters, not against reporting standard errors.

More on this here.

H/T R. Briggs.