Tag Archives: Economic Development

jua kali will not take us where we want to go

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Informal businesses provide employment for millions of Kenyans. Kiosks (both big and of the mama mboga variety), the mitumba business, matatus and even peasant agriculture are what keeps the average Kenyan going. Because of governance issues – like corruption and poor laws – the formal sector of the Kenyan economy has consistently failed to provide enough jobs for the ever growing population. That said, I believe that the jua kali (informal) sector will not take Kenya where it wants to go. Economic History teaches us that scale has merits. It provides the resources for R&D, lowers operational costs and generates revenue for the government because it is hard to hide profits from the taxman like is commonplace in Kenya’s jua kali sector. Plus if we have scale we can export surplus production to places all over the Continent thus creating even more Kenyan jobs – why should we cede these markets to the Chinese, Indians and other “Dubai” traders?

That is why I think that Jaindi Kisero has a point with regard to Kenya’s matatu-dominated transport sector. It is time Nairobi, if not all major cities and towns, had decent public transportation unlike the chaotic and thuggish matatu industry. The matatu industry has given rise to a matatu culture that has taken vulgarity and criminality to a new level – the epitome of which is the dreaded Mungiki sect. Because of this, most reasonable people would concur that “formalizing” public transportation and the matatu industry would go a long way in reducing crime and bringing some sanity to Kenyan roads. Now if only there was a place where we could purchase political will and secretly feed it to Kenyan politicians.

And in other news, Somalis in the southern part of the country will be forced to go hungry after al-Shabab kicked out the WFP. About 900,000 people will be affected by the WFP decision. 2.8 million Somalis are dependent on food relief. The WFP decided to close shop in the face of several demands from al-Shabab (the demands were not all bad, I should add. One of them was that the WFP should not import food during the harvest season in order to promote local agriculture. These al-Shabab types know something about the demerits of food aid in Africa, it seems). Somalia has not had a functional government since the fall of Siad Barre in the early 1990s. Sometimes I wonder whether instead of the US paying the Ethiopians to invade Somalia it might have been better to have the Islamic Courts Union run the country. Well, at least for some time before incentivizing their being less predatory and misogynistic. Most politicians the world over have a price. Especially once they have tasted real power.

Lastly, Somalia is not all gloomy. If you are daring enough you can make money in the land of the al-Shabab, without being involved in piracy.

development issues

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My promise to write a post on African development is almost becoming like Dr. Dre’s promise to release the Detox album. I promise it will come soon, after I settle on an opinion that is robust enough to withstand more than a few critiques.

For now we should be content listening to much wiser development experts – like Blattman, TN Srinivasan (the man who taught me intermediate microeconomics) and cynic in chief Bill Easterly.

A few years ago I used to conflate economic development with modernization. I thought that all it took to make vibrant economies in the global south was the importation of technology, material goods and ideas of governance from the more developed parts of the globe. But time has taught me that historical lock-in effects matter. The global south’s geography, historical poverty and social structures have created path dependencies that will take a lot of time to undo. This is not to say that we should give up on the idea of accelerated development. What I am suggesting is that as we do this we should have it in mind that certain things take time to change and that short-term failures disappear when you look at the long-term picture.

In other news, the conflict in Darfur has become less sexy and so it is no longer all over the news. But Darfurians are still suffering. The same applies to the Congo. Here is yet another reminder that the madness in the land of Mobutu continues unabated.

africa still remains the land of disease, not investment

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I am a fan of Business Week magazine. I like the magazine’s short but informative pieces on the state of the world’s economy, especially in these harsh economic times. However, being an ardent Africanist, I am often disappointed by how little coverage there is of the Continent in the magazine. This week’s piece had articles mostly from the US, Europe and Asia – with a few mentions of Latin America, notably Brazil. Africa was nowhere to be seen in terms of investment or economic performance. And this is not just the case with BW. Africa is still largely irrelevant when it comes to global economics – irrelevant in the sense that, with the exception of South Africa, it remains a passive player, being a mere source of raw materials for other regions of the world.

I wonder if anyone in the Continent’s state houses reads any of these international publications. I wonder how many of them look at The Economist’s Middle East and Africa section and hit their heads against the wall thereafter. May be they do, but just don’t give a rat’s behind or don’t know how to begin tackling their nations’ many problems. These are the same clowns who oftentimes complain about the Continent’s negative press. While I agree with them to a point, I think most of the negative press that the Continent gets is well deserved. It is true that way too many African children die before they are five. It is true that most of Africa is still in the 16th century. It is also true that most African leaders are visionless kleptocrats. And most importantly, it is true that Africa remains poor and, objectively speaking, backward not because of her people’s shortcomings but because of poor leadership. Where there is good leadership – like in Botswana and more recently in Mozambique and Tanzanaia – we have seen good things happen.

The Continent has to stop being a spectator in global politico-economic issues. But this will only happen if its leaders take their jobs more seriously. Less sleaze and arbitrary government will definitely help.

the lion meets the panda: China in Africa

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So the Chinese, with their increasing hunger for raw materials, have been scouring the African continent looking for all manner of trade partnerships – all in an attempt to secure the supply of the essentials needed to fuel the East Asian monolith’s fast growth.

A stroll through many an African capital – at least in the East of the continent – will reveal a number of things Chinese. You won’t miss the Chinese workers laying out fiber optic cables or paving roads or even selling food in a Chinese restaurant. After years of living worlds apart, the lion and the panda have decided to become bosom buddies.

But is the relationship symmetrical? Can the panda and the lion cohabit in a sustainable and mutually beneficial manner? Many people have complained that the coming of the Chinese to the African continent will only serve to exacerbate the continent’s position as a mere source of raw materials. I beg to differ. This stance assumes that Africans and their leaders do not know what is good for themselves and are easily fooled – in the past by the Europeans and now by the Chinese.

The Africa that Europe encountered back in the nineteenth century is very different from the one that the Chinese are engaging with today. Furthermore, the Chinese are not here to merely take away things the way Western Europe did, they pay for the stuff they take. They may not pay well enough but the point is that they pay, plus there is no hand-chopping bula matari or a pontificating Smith Hempstone. On top of that the Chinese have created numerous jobs for the local people, be it in manual construction work or in higher level management and consultancy.

As the West continues to shy away from Africa because of the continent’s lack of or perceived lack of democratic institutions, the Chinese are taking advantage of the situation and reaping the benefits. The Africans are benefiting too.

It is high time the rest of the world took the pragmatic approach that China and increasingly India have taken in their relationship with Africa. Democracy and good institutions can only be supported by good economic outcomes and vise versa (Read scholars like Dahl, Moore, Przeworski, etc). The deepening of democratic beliefs and practices necessarily require economic development. Democracy’s proselytizers in Washington and Brussels should be informed that their lectures on liberties and human rights that are not backed by cranes, computers and jobs are akin to playing guitar to a goat.

So overall, I think that the new-found friendship between the lion and the panda is, at the macro level, a good thing. Darfur and other atrocities may tarnish this relationship but down the road we shall someday look back and with hindsight appreciate China’s contribution to Africa’s economic take-off. A word of caution for the panda though, the lion may seem lazy and unconcerned in the heat of the Savannah, but never take him for granted. He can pounce without warning and has the habit of switching lionesses with wanton abandon.