Eastern Africa’s Heroine Coast

ENACT has a great report out on heroine trafficking along the eastern seaboard of Africa (most of the heroine comes from Afghanistan):

Screen Shot 2018-07-02 at 10.28.08 AM.pngIn recent years, the volume of heroin shipped from Afghanistan along a network of maritime routes in East and southern Africa appears to have increased considerably. Most of this heroin is destined for Western markets, but there is a spin-off trade for local consumption. An integrated regional criminal market has developed, both shaping and shaped by political developments in the region. Africa is now experiencing the sharpest increase in heroin use worldwide and a spectrum of criminal networks and political elites in East and southern Africa are substantially enmeshed in the trade. This report focuses on the characteristics of the heroin trade in the region and how it has become embedded in the societies along this route. It also highlights the features of the criminalgovernance systems that facilitate drug trafficking along this coastal route.

The report provides a detailed analysis of the political economy of drug trafficking in Kenya, Tanzania, Mozambique, and South Africa. Among these countries, only Tanzania’s political elites appear to not have links to known drug barons.

In the specific case of Kenya:

Between 2001 and 2008, there were numerous public allegations of drug trafficking in Kenya, and several MPs and their associates were named. Of those listed in a US embassy report, and subsequently named in Parliament as being linked to the narcotics trade, six are current or former holders of political office. Among them, five have held (or still do hold) political office in Kenya’s Eastern Province: William Kabogo, former Kiambu County governor; Gideon Mbuvi (alias Mike Sonko), 2nd Governor of Nairobi; John Harun Mwau, former assistant minister and former MP for Kilome; Simon Mbugua, former MP for Kamukunji (in Nairobi); and Mary Wambui, former MP for Othaya.

From the coastal region, Ali Hassan Joho, Governor of Mombasa, and his brother Abubakar, as well as Mombasa businessman Ali Punjani, were also named as prominent drug traffickers in the same report (in fact, the US report allegedly claims that Punjani and several other traffickers funded Ali Hassan Joho’s 2007 campaign to win a seat as an MP for Mombasa). Harun Mwau, along with businesswoman Mwanaidi Mfundo (alias Mama Lela), who is now in prison in Tanzania on drug-trafficking charges, were listed as drug ‘kingpins’ by the US in 2011. All have denied these allegations. A subsequent investigation into claims made in the Kenyan Parliament by police was said to have absolved them, but in very controversial circumstances.

Harun Mwau, perhaps the most prominent figure caught up in these allegations, has been widely cited by our interlocutors as an early ‘model’ of how to combine the shadow economy, politics and business. Mwau has repeatedly denied being involved in drug trafficking. He is a prominent businessman and former shareholder in the region’s biggest supermarket chain, Nakumatt (holding shares worth US$10 million, which he has since offloaded). He owned a bank (Charterhouse), and has had a varied political career: he headed the anticorruption agency and was a national lawmaker; he also ran for president. He was a major funder of Mwai Kibaki’s election campaign as president and was subsequently appointed as assistant transport minister, a position in which he appears to have been responsible for Kenya’s container transport arrangements and for the Kenya Ports Authority, which controls all ports of entry and inland container terminals in Kenya. Mwau resigned from this position after being named in Parliament as being linked to drug trafficking. For many years, Mwau operated an inland container depot at Athi River on the outskirts of Nairobi, known as the Pepe Container Freight Station.

The whole report is worth reading.

Extreme Tibout? To avoid sanctions Iranians bought Comoros passports

This is from Reuters:

The Comoros Islands, a nation of about 800,000 people, began its programme to sell passports in 2008 as a way of raising much-needed cash. The islands arranged a deal with the governments of the United Arab Emirates (UAE) and Kuwait, who wanted to provide stateless inhabitants there known as the Bidoon with identity documents, but not local citizenship. The governments would buy the Comoros passports, and then distribute them to the Bidoon.

In return, the Comoros was meant to receive several hundred million dollars to help develop its economy, whose output amounts to just $600 million a year.

At the time, the Comoros was also forging ties with Iran. The islands’ president from 2006 to 2011 was Ahmed Abdallah Mohamed Sambi, who had studied for years in the Iranian holy city of Qom.

… In all, more than 1,000 people whose place of birth was listed as in Iran bought Comoros passports between 2008 and 2017, according to details of a database of Comoros passports reviewed by Reuters. The majority were bought between 2011 and 2013, when the international sanctions were tightened, particularly on Iran’s oil and banking sectors.

By the way, Comoros has since cut ties with both Iran and Qatar.

 

How resilient is the Kenyan economy?

The FT has a great special report on investing in Kenya. Highlights include pieces on devolution, President Uhuru Kenyatta’s “Big Four” legacy projects (including an ambitious plan to build 500,000 new homes), and the promises of the tech sector.

Meanwhile, nominal GDP growth is projected to remain respectable, despite sky-high corruption and generalized administrative failures in both the county-level and national governments.Screen Shot 2018-06-28 at 6.28.18 AM.pngAnd here is an excerpt from one of the pieces:

A 2016 report from New World Wealth, an independent South Africa-based research group, found that 8,500 of Kenya’s roughly 48m people controlled more than two-thirds of the country’s wealth.

Highly recommended.

A theory of Ethiopia’s Abiy Ahmed

Since getting into office, Ethiopia’s Prime Minister Abiy Ahmed has moved swiftly to implement both political and economic reforms. On the political front, he has released political prisoners, unbanned blogs, described violations of human rights by security officers as terrorist acts, and called for term limits for Prime Ministers. On the economic front, he has sounded the alarm over Ethiopia’s $26b foreign debt, wants to privatize important sectors of the Ethiopian economy, and has been working Ethiopia’s neighbors to strengthen economic ties (including ports deals with Somalia and electricity markets in Kenya, Sudan, and Tanzania).

Screen Shot 2018-06-25 at 11.10.38 AM.pngWhy Abiy and why now? It is certainly still early days, but I think he might be a case of a lucky draw at a critical time. In the face of sustained popular protests that began in 2015, Ethiopia was definitely overdue for reforms. But it was not a given that the TPLF (a key player in the EPRDF) would be willing to give power to a popular leader like Abiy. They took a guided gamble with a young former military man and lost (guided because they were somewhat forced to select an ethnic Oromo as Prime Minister).

And as a result the TPLF found themselves with a Prime Minister that is more popular than the EPRDF. That makes him harder to manipulate.

Once in office, Abiy took on the reform agenda with a lot more zeal than they had anticipated. His peripatetic approach to governance can be explained by Ethiopia’s headline economic indicators. The country exports a mere $3b worth of goods (against $18b in imports), which at 6.2% is the second lowest export/GDP ratio in Africa. Ethiopia has also been burning hard cash at a clip, forcing a 15% devaluation of the Birr and a recent $3b lifeline from the UAE. It goes without saying that the country needs to export more if it is going to create jobs at a faster rate for its youthful population. 70% of Ethiopia’s 100m citizens are below 30, and 80% of them live in the countryside.

This is from The Conversation:

The ruling party, the Ethiopian People’s Revolutionary Democratic Front which has been in power for nearly 30 years, is decaying. It lacks the political will to introduce fundamental reforms which would address issues like endemic corruption, the incarceration of journalists and political opponents and widespread economic marginalisation.

These concerns precipitated protests from various segments of society and forced former Prime Minister Hailemariam Desalegn to resign.

Abiy emerged from within the ruling party amid this disarray. His message was markedly different. He spoke the language of the people and tapped into society’s aspirations and fears. While it was expected that he’d be a safe pair of hands for ordinary people as well as the ruling elites, nobody expected him to be as direct and decisive as he has turned out to be in his reform efforts.

These have met with resistance, particularly from the Tigrayan People’s Liberation Front, which is the dominant wing of the ruling coalition. It’s started to act as an opposition from within to Abiy’s work.

The rally at which the attack occurred was called to disentangle Abiy from the establishment and give him a unambiguous mandate to run the country.

People are enchanted with his message of “medemer”, or togetherness, as opposed to ethnic compartmentalisation. They support his systematic and nonviolent removal of corrupt leaders who thrived on spreading fear and using violence to cling to power.

In what appears to have been an assassination attempt, on Saturday a grenade attack killed two people and injured dozens in a rally addressed by Abiy Ahmed. So who might want Abiy gone?

…… one can say with some level of justification that whoever made this attempt must have felt threatened by Abiy’s popularity, message and reform efforts. Ethiopians are accustomed to fearing their leaders. But Abiy is loved.

And despite his refreshingly reformist record so far, it is also worth highlighting the risk of relying on Abiy the individual as opposed to a system of governance that can survive the man:

There is also good reason to question whether or not he is producing supporters who would see him as a cult hero rather than someone who can be criticised, questioned and held to account when he crosses the line.

While this should be a source of caution, the gravest danger to lasting reforms is likely to come not from personalist rule by Abiy but from the TPLF old guard. There is also the real danger that Abiy will under-deliver and create even greater frustration among hopeful Ethiopians.

 

How did Sierra Leone beat river blindness?

This is from The Economist:

…. Sierra Leone is doing better at beating back neglected tropical diseases (NTDs) than almost anywhere else in Africa. Fifteen years ago as much as half the population was infected with the worm that causes onchocerciasis, or river blindness. Many villagers in the south-east used to think it was perfectly normal for people to go blind after 30, says Mary Hodges, from Helen Keller International, a charity that works on blindness and malnutrition. Yet by 2017 only 2% of people carried the worm, and there had been no new cases recorded of people going blind from onchocerciasis in a decade. Elimination is expected by about 2022.

Screen Shot 2018-06-22 at 6.53.27 AM.png

What is Sierra Leone’s secret? Apparently, it’s because a high initial disease burden made inaction not an option:

Paradoxically, one is the extraordinarily high prevalence of NTDs. Because the entire population was exposed to at least one NTD, the government made it a priority early on, says Dr Joseph Koroma, who managed its programme. And instead of dealing with these diseases separately, Sierra Leone tackles them all at once.

This is a big win for global public health and the Carter Center.

Here is a great read on how the Guinea worm was eliminated in Burkina Faso.

However, despite success stories like Sierra Leone, it is worth noting that the global fight against river blindness is being made harder by the fact that dogs are becoming the new carriers of Guinea worms.

Why is Madagascar the only non-conflict country to have grown poorer since independence?

FT’s David Pilling asks this question in a great piece interrogating Madagascar’s decline:

Screen Shot 2018-06-19 at 11.24.33 AMPresident Hery Rajaonarimampianina is weathering the latest in a series of political crises that have debilitated his nation since independence in 1960. In that period, Madagascar is the world’s only non-conflict country to have become poorer, according to the World Bank. Its income per head has nearly halved, to about $400 [see image with the sobering trend data from the World Bank].

A leading candidate for explaining the decline is that the Malagasy state does very little:

“Madagascar is the world’s forgotten island,” said Patrick Imam, the IMF’s representative to the country, who argues the west should pay more attention. “This is probably one of the few countries in the world where the IMF cautions the government: ‘You are not spending enough money,’” he says, referring to the limited presence of the state outside Antananarivo.

According to World Bank data, since the mid-1960s government expenditure in Madagascar has consistently been below the regional average:

Screen Shot 2018-06-19 at 11.13.34 AMRead the whole thing here.

A somewhat speculative explanation might be the abolition of the Merina monarchy in the late 19th century by the French. For much of its post-colonial history Madagascar has been racked by one episode of elite political instability after another. A stable monarchy might have provided a nucleus around which to construct elite consensus on legitimate means of organizing the country’s political economy.

 

Colonial education, social status, and social mobility in Uganda

This is from an exciting paper by zu Selhausen et al. in Economic History Review:

This article uses Anglican marriage registers from colonial and post‐colonial Uganda to investigate long‐term trends and determinants of intergenerational social mobility and colonial elite formation among Christian African men. It shows that the colonial era opened up new labour opportunities for these African converts, enabling them to take large steps up the social ladder regardless of their social origin. Contrary to the widespread belief that British indirect rule perpetuated the power of African political elites (chiefs), this article shows that a remarkably fluid colonial labour economy actually undermined their social advantages.

Screen Shot 2018-06-14 at 8.00.13 PM

conditional probability of entering Class I (Kampala)

Sons of chiefs gradually lost their high social‐status monopoly to a new, commercially orientated, and well‐educated class of Anglican Ugandans, who mostly came from non‐elite and sometimes even lower‐class backgrounds. The study also documents that the colonial administration and the Anglican mission functioned as key steps on the ladder to upward mobility. Mission education helped provide the skills and social reference needed to climb the ladder in exchange for compliance with the laws of the Anglican Church. These social mobility patterns persisted throughout the post‐colonial era, despite rising levels of informal labour during Idi Amin’s dictatorship.

Status inversion/disruption during colonialism is significantly under-appreciated as a cause of elite political instability in post-colonial Africa (paper on this coming soon). Ghana, Nigeria, and Uganda are paradigmatic examples of this phenomenon of educated “commoners” butting heads with established pre-colonial ruling elites following independence. 

The authors also call for a more nuanced understanding of political power under British indirect rule:

Although many Ugandan chiefs were appointed as administrative officials under indirect colonial rule and in this way exercised both political and economic power over the local population, our micro‐evidence portrays a society in which access to secondary education and a labour market seemingly based on meritocratic criteria caused chiefs’ colonial power gradually to disappear. This shift, which was helped by colonial land reforms and increased African access to Kampala’s formal labour market, challenges the perception of British indirect rule as ‘decentralised despotism’. It also illustrates how mission education did more to foster social mobility among our sampled grooms than to entrench the traditional privileged classes.

Read the whole paper here (gated).

 

 

David Ndii on the Kenyatta-Odinga “Handshake” and what it means for Kenyan politics going forward

Ndii contends that “whatever comes out this [Kenyatta-Odinga handshake] … will not be transformational.” It is merely a “containment.”

Ndii also concedes that it’s impossible to work around ethnicity as the primary basis of organizing Kenyan politics.

The whole thing is worth watching:

North Korea is now a globally recognized nuclear power

That is the conclusion of Narang and Panda in the Times:

North Korea has arrived as a nuclear power, and there is no going back. Once the reality-show theatrics of the Singapore summit meeting subside, we are left with the reality that North Korea was just recognized as a de facto nuclear weapons power.

…. Didn’t he just agree to “work towards complete denuclearization of the Korean Peninsula”? He did. Just like his grandfather’s deputies did in 1993. That phrase — “denuclearization of the Korean Peninsula” — is a term of art that the United States and North Korea can interpret to suit their interests.

More on this here.

Any normalization of relations or easing of sanctions with North Korea will have implications for a number of African states (see here and here) that have enjoyed lucrative economic ties with Pyongyang (mostly through the import of arms and statues).

The consequences of the vanilla boom: Madagascar Edition

Vanilla is currently rivaling the value of silver, per unit weight.

That has come with consequences for Madagascar, which accounts for 80 percent of the global production of natural vanilla. According to FT:

Madagascar, which supplies 80 per cent of the world’s natural vanilla, is in the grip of a vanilla boom. “People are saying, ‘I don’t care about growing food to feed myself. I only want to grow vanilla’,” says Eugenia Lopez, an agricultural expert with Swiss development agency Helvetas. Girls are dropping out of school to marry “vanilla barons”, and sales of televisions, alcohol and other luxuries are high. “People are buying cars and motorbikes that they won’t even be able to fill with petrol when the price of vanilla crashes,” says Ms Lopez.Screen Shot 2018-06-05 at 10.03.27 AM.png

Not all the value is trickling to farmers. And the sector remains highly volatile, but with minimal options for smoothing consumption among affected farmers.

While the likes of Coca-Cola, Unilever, the British-Dutch consumer goods group, or Danone, the French food company, are forced to pay inflated prices, farmers receive only 5 to 10 per cent of the value of their crop [!!!!], according to industry observers.Worse, they say, if farmers switch to lucrative vanilla and abandon food crops such as rice and manioc, they could be left in desperate straits when the vanilla market crashes, as it inevitably will. Vanilla has been through violent booms and busts before. Only five years ago, it was trading at $20 a kilogramme against some $515 now, down from a recent peak of $600 and compared to a silver price of $528/kg.

More on this here.

Meanwhile, Madagascar is in the midsts of a political crisis ahead of elections scheduled later this year.

… a dispute over electoral minutiae had spiralled into a full-blown political crisis. A month on, the situation seems intractable.

The original rally centred on some controversial laws that would have made certain opposition candidates ineligible for elections scheduled for November. Most notably, the changes would have barred both Marc Ravalomanana, president from 2002 until he was removed in a coup in 2009, and Andry Rajoelina, the coup leader who took over as president until 2013, from running.

….. On 3 May, the High Constitutional Court (HCC) rejected a number of clauses in the new laws as unconstitutional. This included those provisions that would have prevented Ravalomanana and Rajoelina from running.

According to Malagasy law, the next step should have been for the executive to send the legislation back to parliament for review. But instead, the president unilaterally amended the laws and published them on 11 May.

The military has threatened to intervene, again, if the politicians fail to resolve their differences.

H/T Pavel

Religious offerings as insurance?

This is from Auriol et al.

This paper presents experimental evidence exploring how insurance might be a motive for religious donations by members of a Pentecostal church in Ghana. We randomize enrollment into a commercially available funeral insurance policy and let church members allocate money between themselves and a set of religious goods in a series of dictator games with significant stakes. Members enrolled in insurance give significantly less money to their own churches. At the same time, enrollment in insurance reduces giving towards other spiritual goods. We set up a model exploring different channels of religious based insurance. The implications of the model and the results of the dictator games suggest that adherents perceive the church as a source of insurance and that this insurance is derived from beliefs in an interventionist God. Survey results suggest that community-based material insurance is also important and we hypothesize that these two insurance channels exist in parallel.

…. Our findings add to the literature on the economic functions of religious organisations by providing experimental evidence that a religious institution can be used as a substitute for a formal financial service in an environment where obstacles to the functioning of the formal market are high. Furthermore, the experimental findings add nuance to the literature on religious institutions as coordinating platforms by demonstrating that adherents might care as much about spiritual insurance (affecting outcomes through signalling to an interventionist God) as they do about material insurance (accessing transfers of goods and services from other church members).

The paper, of course, provides micro evidence of wider country-level correlations between income (which maps onto financial access) and religiosity.

Religion_economy.png

 

Are Africa’s political and economic elites the most complacent class in the world?

This is speculative.

Africa’s elites are arguably the most complacent in the world. They engage in almost no innovation — whether in the fields of governance, technology, religion, philosophy, or science. This is not to say that there is not any innovation in these fields on the Continent.

Far from it. A lot of innovation is happening on the Continent. The problem is that innovation tends to be purview of individuals who are part of the economic and political underclasses, many of whom lack the power to mainstream their innovations.

Consider the case of which global elites attend the best universities in the world. If you did a survey you would find that political and economic elites from almost all parts of the world are represented in these institutions through their offspring. Africa, on the other hand, tends to be represented by smart but politically and economically disempowered students.

Some of these students are wealthy, but the vast majority are complete political and economic outsiders in their home countries. Many get absorbed into the middle and upper-middle classes of their adopted countries. The offspring of elites from other regions of the world go back home and work to mainstream the ideas learned abroad.

Meanwhile, the offspring of Africa’s political and economic elites largely attend mediocre academic institutions. Many never learn much, including the basics of economic and political management. It is therefore not surprising that many live and aspire to reproduce their parents’ complacency and mediocrity.

Am I painting here with a very broad brush? Perhaps. But show me a prominent African political leader and I will show you an offspring with mediocre grades and limited ambition.

Sierra Leone is the roundest country in the world (Zimbabwe is third)

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H/T Felix Salmon

This reminded me of this paper by Laitin, Moortgat, Robinson:

….. For each country, we measure the degree to which its axes run across ecological biomes relative to within them. This measure takes the form of the ratio of the average length of the north-south axis relative to the average length of the east-west axis. To the extent that the ratio is greater, we ask whether there has been greater persistence of cultural diversity within the boundaries of that state. Diamond’s theory would expect linguistic diversity to erode naturally with east-west migrations. The combining of societies relying on similar technologies would amalgamate those societies into wider speech communities. The theory would then predict the concomitant loss in viability of either the languages of the migrants or those of societies indigenous to the lands that had been populated by those migrants. Meanwhile, the theory would not expect such erosion with north-south migrations, as in this case even small speech communities would survive culturally intact, relying on their special skills related to conditions in climate zones different from where the migrants left.

We find suggestive evidence that the more exogenous a state’s borders are, the greater the impact of geographic orientation on the persistence of cultural diversity. Next, we evaluate the impact of axis ratio on the persistence of diversity among artificial geographic units comprised of contiguous neighbors, and again find a positive relationship. All of these results provide consistent evidence that the degree to which a geographic unit is oriented more north-south than east-west is related to the persistence of cultural diversity within that unit.

Here are the three least round countries:

Screen Shot 2018-05-11 at 6.50.30 PM

More on this here.