Is Tanzania more unequal than Kenya?

In the 1970s, prominent critics of Kenya’s capitalist economy often characterized the country as a land of 10 millionaires and 10 million beggars. Many also (implicitly) compared Kenya to Tanzania. Back then, Tanzania was in the midst of implementing Ujamaa under President Julius Nyerere. The trope of Kenya being a highly unequal “dog-eat-dog society,” and Tanzania being less unequal stuck, and persists to this day.

But the data tell a different story. According to the Knight Frank Wealth Report, Tanzania has the fifth largest number of high networth individuals in Africa ($30m and more), ahead of Kenya:

South Africa led the pack with 1,033 ultra-rich persons followed by Egypt (764) Nigeria (724) Morocco (215) and Tanzania (114)

Kenya is 6th, with only 42 individuals worth more than $30m.

Kenya has a Gini index of 40.8 (2015) and Tanzania 40.5 (2017).

How Many People Died Of The 1918 Spanish Flu in Kenya?

This is the abstract and excerpts from Andayi, Chaves, and Widdowson, a paper focusing on the impact of the Spanish flu on coastal Kenya:

The 1918 influenza pandemic was the most significant pandemic recorded in human history. Worldwide, an estimated half a billion persons were infected and 20 to 100 million people died in three waves during 1918 to 1919. Yet the impact of this pandemic has been poorly documented in many countries especially those in Africa. We used colonial-era records to describe the impact of 1918 influenza pandemic in the Coast Province of Kenya. We gathered quantitative data on facility use and all-cause mortality from 1912 to 1925, and pandemic-specific data from active reporting from September 1918 to March 1919. We also extracted quotes from correspondence to complement the quantitative data and describe the societal impact of the pandemic. We found that crude mortality rates and healthcare utilization increased six- and three-fold, respectively, in 1918, and estimated a pandemic mortality rate of 25.3 deaths/1000 people/year (emphasis added). Impact to society and the health care system was dramatic as evidenced by correspondence. In conclusion, the 1918 pandemic profoundly affected Coastal Kenya. Preparation for the next pandemic requires continued improvement in surveillance, education about influenza vaccines, and efforts to prevent, detect and respond to novel influenza outbreaks.

We noted, that in 1918, the crude death rates and healthcare utilization drastically increased, six- and three-fold, respectively and stayed relatively high until at least 1925. The sharp increase in health care utilization was certainly due to the pandemic and is corroborated by the anecdotal reporting of overwhelmed health systems. The very large majority of these cases would have been in the native population, though we had no data on race. The higher rates of mortality and facility visits after 1918 compared to before 1918 were likely due to improved reporting health facility expansion rather than prolonged pandemic transmission. Equally, it is plausible that several documented outbreaks such as the plague (1920) and smallpox (1925), also contributed to high reported mortality and morbidity in those late years studied. We estimate pandemic mortality from September 1918 to March 1919 to be approximately 25 deaths/1000 population and morbidity at 176/1000 population or an attack rate of 17.6% (emphasis added).

Read the whole (ungated) paper here.

Writing over at The Conversation, Andayi notes that overall the flu might have killed as many as 150,000 people in the Kenya Colony, or 4-6% of the population at the time. The Spanish flu (which actually probably originated in New York) could have killed anywhere between 1-5% of the global population.

The Spanish flu is believed to have come to Kenya with returning veterans who docked in the Mombasa port. The country was still a British colony at the time. In nine months the epidemic killed about 150,000 people, between 4% and 6% of the population at the time.

COVID-19 is nowhere near these mortality rates. The estimates I have seen (which for some reason are for “Africa” and not individual countries) suggest that between 300k and 1.3m people might die of COVID-19 on the Continent (see image with UNECA estimates). Proportionately, that would mean roughly between 12k – 51k Kenyans, or .03-.01% of the population (still absolutely catastrophic figures).

uneca

If you know of any country-level estimates please share in the comments.

 

How Good Are Datasets on Cropland in African States?

A number of papers (on agricultural productivity, conflict, food security, and impacts of climate change, for example) use cropland cover data as controls. How good are these data?

Here’s the abstract of a paper (open access) from Wei and co-authors:

Accurate geo-information of cropland is critical for food security strategy development and grain production management, especially in Africa continent where most countries are food-insecure. Over the past decades, a series of African cropland maps have been derived from remotely-sensed data, existing comparison studies have shown that inconsistencies with statistics and discrepancies among these products are considerable. Yet, there is a knowledge gap about the factors that influence their consistency. The aim of this study is thus to estimate the consistency of five widely-used cropland datasets (MODIS Collection 5, GlobCover 2009, GlobeLand30, CCI-LC2010, and Unified Cropland Layer) in Africa, and to explore the effects of several limiting factors (landscape fragmentation, climate and agricultural management) on spatial consistency.cropland

The results show that total crop-land area for Africa derived from GlobeLand30 has the best fitness with FAO statistics, followed by MODISCollection 5. GlobCover 2009, CCI-LC 2010, and Unified Cropland Layer have poor performances as indicated by larger deviations from statistics. In terms of spatial consistency, disagreement is about 37.9 % at continental scale, and the disparate proportion even exceeds 50 % in approximately 1/3 of the countries at national scale.We further found that there is a strong and significant correlation between spatial agreement and cropland fragmentation, suggesting that regions with higher landscape fragmentation generally have larger disparities. It is also noticed that places with better consistency are mainly distributed in regions with favorable natural environments and sufficient agricultural management such as well-developed irrigated technology. Proportions of complete agreement are thus located in favorable climate zones including Hot-summer Mediterranean climate(Csa), Subtropical highland climate (Cwb), and Temperate Mediterranean climate (Csb). The level of complete agreement keeps rising as the proportion of irrigated cropland increases. Spatial agreement among these datasets has the most significant relationship with cropland fragmentation, and a relatively small association with irrigation area, followed by climate conditions. These results can provide some insights into understanding how different factors influence the consistency of cropland datasets, and making an appropriate selection when using these datasets in different regions. We suggest that future cropland mapping activities should put more effort in those regions with significant disagreement in Sub-Saharan Africa.

Here’s what they did:

…. we compared the spatial agreement of cropland to assess the consistency of five datasets in the same location. These datasets were overlapped to generate a new composite map revealing whether and where the original datasets agreed on the same locations (Yang et al., 2017). Pixels of the composite map were assigned values ranging from 0 to 5. The highest value 5 represents the complete agreement, where all five datasets were consistent in cropland identification for a pixel. As the value decreases, spatial consistency between these crop-land datasets decreases. The lowest value with value 1 means that only one dataset identifies the pixel as cropland.cropland_cover

The best consistency of five datasets occurs in Egypt, with the complete agreement value of 47.86 %, while the highest disagreement is in Western Sahara, whose spatial disagreement is 91.08 %.

Some Policy Lessons from COVID-19

It’s has been illuminating watching African governments respond to the COVID-19 pandemic. Here are some lessons I have gleaned from their responses. For those interested, the IMF has a neat summary of county-level policy responses.

[1] We need a lot more descriptive studies of African economies:

COVID-19 was slow to spread in African states (a reminder of the Continent’s isolating from global transportation networks. The first concentrated cases were in Egypt, largely among tourists on Nile cruises). But once cases started appearing across the Continent, governments rushed to implement policies that were eerily similar to those being implemented in wealthier economies. Complete lockdowns, tax breaks, business loans, and interest rate cuts were first to be announced. Cash transfers followed, but even then from the standard purely humanitarian perspective and not as part of a well-thought out, politically-grounded and sustainable policy response. Forget that African economies are (1) largely agrarian and rural; and (2) highly “informal” (i.e. under-served and under-regulated). How do you implement a lockdown when 80% of your labor force is dependent on daily earnings and cannot stock up on food for days? And how do you tell people “wash hands regularly” when the vast majority of your population lacks access to reliable running water? Do African states have the capacity to sustainably deliver cash transfers to needy households throughout this crisis?

In short, African states’ policy responses to the pandemic so far are an urgent reminder of the enormous gaps that exist between knowledge production, policymaking, and objective realities in the region. Now more than ever, there is a need for socially and politically relevant knowledge production. To bridge these gaps, African governments should invest in making their economies more legible. Such investments should target better data collection as well as the establishment of strong academic departments with expertise in political economy and economic history, in addition to other economics subfields. There is absolutely no way around this.

For instance, what do we know about recovery patterns after recessions in different African countries? How will the current shutdown impact rural livelihoods? African states cannot afford to continue making policy from positions of ignorance, or to outsource economic thinking and policymaking. Collect the data. Analyze the data. Have the results inform policy.

Such efforts will go a long way in helping craft domestic narratives and counter-narratives of socio-economic transformation, and hopefully entrench reality-based policymaking, in addition to putting an end to ahistorical and apolitical policymaking. Policymakers must understand that their economies are not simply Denmark waiting to happen. 

[2] African governments should strengthen their policy transmission mechanisms: 

One of biggest mistakes in the history of economic thought was the invention of the notion of “formal” and “informal” economic sectors. This arbitrary distinction continues to blind African policymakers, and limits their abilities to craft transformative policies. In most African countries, governments fixate on minuscule “formal” sectors, and spend billions of dollars attracting mythical foreign investors to create “formal” sector jobs (and in the process subsidize transfer pricing and the creation of very costly enclave economies). Meanwhile, the same governments ignore “informal” and agricultural sectors, despite the fact that in most countries they typically account for significant shares of output (see images) and upwards of 80% of the labor force.

 

The failure to adequately serve and regulate “informal” and agricultural sectors leaves African policymakers with a set of very blunt tools when it comes to these sectors. How will African governments ensure that SMEs are not completely wiped out by this crisis? How will farm-to-market systems weather the logistical problems caused by large-scale shutdowns? What will be the impact on food prices?

It makes little sense to lower SME taxes or incentivize bank lending to SMEs if the vast majority of SMEs neither pay taxes nor borrow from banks. “Informal” sector workers are typically also not plugged into any skeletal social safety nets that may exist, such as health insurance or pension schemes.

For example, “[i]n Senegal one 2016 government/Millennium Challenge Corporation study found [that] only 15 companies pay up to 75% of the state’s tax revenue.”

Moving forward, African countries need to jettison the “formal” vs “informal” sectors distinction. As the primary source of employment, the “informal” and agricultural sectors deserve a lot more public investments targeted at both broader market creation (domestic and international) and productivity increases. Such investments would give governments important policy levers during both good and bad times. 

The fact of the matter is that agriculture and SMEs are the mainstays of African economies. It is about time that African states’ economic policies and budgeting reflected that reality. Failure to do so will continue to severely limit the efficacy of policy interventions, and leave governments wasting scarce resources attracting investments with very little multiplier effects in their economies.

[3] Elite complacency in Africa is about to get a lot more expensive: 

One need not be wearing a tinfoil hat to see the many ways in which African leaders continue to act like colonial “Native Administrators”. Some do not even pretend to care about aspiring to govern well-ordered societies. For almost six decades the global state system has accommodated elite mediocrity in Africa. During this period, the collusion between African and non-African elites in the pilfering of the region’s resources was balanced with aid money and other forms of support. 

That is changing. Western elites and publics have began to question the utility of foreign aid. Forgetting that the aid is what buys elite-level African alliances, they have come to expect loyalty from African states as a pre-ordained birthright. Many Western countries have also seen significant deterioration in the quality of their political leadership in the recent past, thereby exposing them to a range of domestic crises that will likely distract them into the medium term. China, the other major global player, is not ready to step into the void. 

And so African elites will be forced to step up. What do you do when, after decades of presiding over abominable public health systems that are totally dependent on the generosity of foreigners, you cannot get on a plane to seek medical care abroad? And how do you deal with a pandemic that hits the entire globe at once?

It is no secret that the Global Public Health architecture was built to police and contain disease outbreaks in low-income countries. This has allowed African governments to routinely globalize their public health emergencies and therefore get away with poor governance and lack of dependable healthcare systems.

The combination of an inward orientation of the “international community” and likely recurrence of truly global pandemics will mean that African states will have to build robust and sustainable domestic healthcare systems. It will no longer be a given that the American CDC or the WHO will swoop in with solutions. Under these conditions, failure to plan will likely lead to mass deaths in African states. 

[4] African progressivism needs a reset:

As Toby Green documents in A Fistful of Shells, modern African progressivism (defined as working towards broad-based transformative change) has a long history — going back to the 18th century. Men like Usman dan Fodio reacted to what they perceived to be elite complacency and moral depravity by organizing and seizing power. However, it is fair to say that the postcolonial variant of  progressivism in the region has run out of steam. In nearly every country, it has become permanently oppositionist and anti-establishment. Life out of power has infused it with a streak of expressive performativity that is increasingly divorced from the political and economic realities in the region, and sorely lacking in intellectual rigor (there are exceptions, of course). Arguably, the Thomas Sankara administration (with warts and all) was the last truly progressive administration in the region.

It is about time that African progressivism focused not just on criticizing those in power, but also on developing viable political programs that can win power. This will require organization, political education and communication that resonates with mass publics, genuine openness to knowing “the realities on the ground”, and a dose of principled ideological promiscuity pragmatism. The habit of waiting for perfectly enlightened voters and politicians under perfect institutional conditions effectively concedes the fight to the region’s shamelessly inept water-carriers. 

After 60 years in power, Africa’s ruling elites have become perhaps the most complacent lot in the world. Their destruction of higher education and the region’s intelligentsia in the 1970s allowed them to limit the role of ideas in politics and policymaking. It also helped that they found willing “apolitical” development partners in the “international community.” Even the most “progressive” among them care more about their countries’ rankings in the World Bank’s “Doing Business Index” than in the state of their “informal” and agricultural sectors. 

It is time to infuse African leadership with new thinking and moral foundations of social contracts. Only then will the region’s states be in a position to build the necessary resilience to weather emergencies like COVID-19, and provide necessary conditions for Africans to thrive at home and abroad.

World Bank Aid and Corruption

Here’s the now infamous paper that the World Bank is alleged to have tried to censor, actions that led its Chief Economist Penny Golberg to resign in protest. The paper finds that increases in World Bank aid is correlated with the siphoning of cash to offshore financial centres.

Do elites capture foreign aid? We document that aid disbursements to highly aid dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not in other financial centers. The estimates are not confounded by contemporaneous shocks such as civil conflicts, natural disasters and financial crises, and are robust to instrumenting with predetermined aid commitments. The implied leakage rate is 7.5% at the sample mean and exhibits a strong correlation with the ratio of aid to GDP. Our findings are consistent with aid capture in the most aid-dependent countries.

….In this paper, we study aid diversion by combining quarterly information on aid disbursements from the World Bank (WB) and foreign deposits from the Bank for International Settlements (BIS). The former dataset covers all disbursements made by the World Bank to finance development projects and provide general budget support in its client countries. The latter dataset covers foreign-owned deposits in all significant financial centers, both havens such as Switzerland, Luxembourg, Cayman Islands and Singapore whose legal framework emphasizes secrecy and asset protection and non-havens such as Germany, France and Sweden.Screen Shot 2020-02-18 at 9.22.48 AM

Equipped with this dataset, we study whether aid disbursements trigger money flows to foreign bank accounts. In our main sample comprising the 22 most aid-dependent countries in the world (in terms of WB aid), we document that disbursements of aid coincide, in the same quarter, with significant increases in the value of bank deposits in havens. Specifically, in a quarter where a country receives aid equivalent to 1% of GDP, its deposits in havens increase by 3.4% relative to a country receiving no aid; by contrast, there is no increase in deposits held in non-havens. While other interpretations are possible, these findings are suggestive of aid diversion to private accounts in havens.

The paper finds that project financing (which is arguably easier for the Bank to monitor) is associated with more leakage than general policy financing. The poorest countries see the most leakage.

Our estimates suggest a leakage rate of around 7.5% for the average highly aid-dependent country.

Read the whole thing here.

UPDATE: The World Bank has since agreed to publish the working paper. 

h/t Matt Collin

A Kenyan slum cartel commandeered a World Bank electrification project

The Standard reports:

Kenya Power yesterday dismantled an illegal power selling racket deep inside a Nairobi slum, exposing how a Sh300 million World Bank-backed slum electrification project was taken over by rogue businessmen.

kplcIn 2016, as part of Kenya’s electricity expansion project, the World Bank’s Global Partnership Output-Based Aid (GPOBA) partnered with Kenya Power to roll out the slum electrification programme aimed at subsidising the cost of electricity to low-income earners and ending illegal connections.

At one of the sites, 200 KVA ground-mounted transformer had been enclosed in a small stonewalled building from where illegal connections originated. The transformer, which Kenya Power impounded, was next to a six-storey flat that got its supply from it. The rest was supplied to dozens of iron sheet-walled houses and a myriad of businesses. The disconnection of the transformer left dozens of residents without power. The power supply is known as “sambaza” and residents said they paid between Sh200 and Sh700 per month to people they described as “agents.”

Here is the World Bank’s take on its Kenya GPOBA slum electrification project (from 2016). The project had significant political and corruption risk exposure from the start:

The project faced initial implementation challenges. After the project commenced, the average cost of each connection increased to around $900 due to the inflation of input costs. In order to adjust to this increase, GPOBA raised its subsidy from $75 to $125 per connection; IDA and KPLC also increased their subsidies to $250 and $510 respectively. The connection target was revised from 66,000 households to 40,000. The disbursement of subsidies was amended from the original two-tranche schedule to a one-time payment triggered by the verification of working connections with pre-paid meters. Another challenge was that slum residents in certain areas were reluctant to switch to legal connections due to issues of trust, payment barriers, and fear of reprisals from local cartels.

To address this issue, KPLC prepared an implementation acceleration plan, a two-track approach differentiating between those slums with rampant illegal connections and strong cartel presence, and informal settlements designated under the World Bank’s Kenya Informal Settlement Improvement Project. In the informal settlements, KPLC prepared for infrastructure improvements; in the slums where residents were reluctant to convert to legal connections, KPLC used a community supportive approach. Their outreach involved strengthening communication with residents through collaboration with youth groups, civil society organizations, and social scientists, and preparation of educational materials and contact points, such as kiosks.

It took more than three years for KPLC (and the World Bank) to act against the said slum cartels, despite the Bank’s own report from 2016 highlighting this as a “challenge” to project implementation.

I couldn’t easily find any World Bank project reviews in the intervening years. If anyone has pointers let me know.

Africa-China Fact of the Month

This is from the China-Africa Project:

In purely economic terms, China matters a LOT to Africa but Africa is effectively meaningless to China. Last year, China did more than $4.14 trillion in total global trade. So that means Africa represents just 4.8% of China’s global trade balance, effectively a rounding error for the world’s second-largest economy.

For some additional context, consider that China does more trade with just Germany ($225.7 billion)  and about the same with Australia ($194.6 billion) than it does with all of Africa.

More on this here.