Answers to Some of Team Trump’s Questions on Foreign Aid to Africa

A piece in the New York Times highlights some of the Africa-related queries posed by Team Trump to the State Department. Sub-Saharan Africa’s 48 countries get $8b in U.S. aid each year. The average country receives far less than critical U.S. allies like Afghanistan ($5.5 billion), Israel ($3.1 billion), Iraq ($1.8 billion) and Egypt ($1.4 billion).

Here are some answers to Team Trump’s questions.

With so much corruption in Africa, how much of our funding is stolen? Why should we spend these funds on Africa when we are suffering here in the U.S.?

 First of all, corruption is not the biggest impediment to success in the aid business. Often, it is poor planning and execution. And most of the time this tends to be the fault of the donors themselves. Research shows that aid works best when complemented with strong local capacities. This requires knowing what those capacities are, or investing in their long term development.

I would suggest that the administration worries more about planning and execution. How can you make your aid agencies better at identifying and executing on projects? How can you help African countries improve their absorption capacity of aid dollars without too much distortion of their local political economies? How can you move away from projects predicated on good will, and into ones that are anchored on self-interest and value creation?

Africans want jobs. Not handouts. And the 0.2% of the U.S. budget that goes to this region each year can be a powerful tool for shifting incentives in the right direction as a far as job creation is concerned. Want to export more GM cars or carrier air conditioning units to Lagos? Then help create the demand by creating jobs in Lagos.

The new administration should also end the double talk of financing corruption and condemning it at the same time.

screen-shot-2017-01-14-at-2-17-58-pmTake the example of security assistance. If you want to reduce corruption in military procurement, I would suggest that you channel all assistance through the normal appropriation processes in African legislatures. More people will know how much money is going where, thereby increasing the likelihood of greater accountability. The same applies for budget support. Strengthen existing constitutional appropriation processes so that bigger constituencies get to own the aid dollars.

Leaders do terrible things all the time for political reasons, and not because of an inherent failure in moral judgment. Learn to respect and trust your African counterparts. Know their interests. Don’t think and act like it is 1601.

We’ve been fighting al-Shabaab for a decade, why haven’t we won?

Well, for a number of reasons. Kenya, Ethiopia, the U.S., and the other TTCs are working at cross-purposes. The first best option would be to strengthen Mogadishu as the center of a strong unitary state. But no one wants that. Not the Somalian elites running the state-lets that make up the federal state. Not Kenya — whose goal seems to be no more than creating a buffer stable region in Jubaland. Not Ethiopia — whose elites are more concerned about Pan-Somalia irredentism and their own domestic politics. And certainly not the TTCs — who are largely in it for the money and other favors from Washington and Brussels. The second best option would probably be to localize the Al-Shabaab problem and then strengthen the Somali state-lets so that they can be able to fight the group. However, by globalizing the “war on terror” the U.S. has largely foreclosed this option. Also, Mogadishu would not want to cede too much military power to the states.

All to say that the U.S. cannot win the fight against al-Shabaab, certainly not by raining fire from the air.

Somalians, with some help from their neighbors, are the best-placed entity to win the war. But for this to happen, all actors involved — and especially Ethiopia and Kenya — must have an honest discussion about both short-term and long-term objectives of their involvement, and the real end game.

Most of AGOA imports are petroleum products, with the benefits going to national oil companies, why do we support that massive benefit to corrupt regimes?

Again, you should not approach this problem from the perspective of a saintly anti-corruption crusader. Moralizing from the high mountains is boring, and does not solve anything. I thought the Trump Team would be into dealing with the world as it is. Appeal to the specific interests involved. Think creatively.

It turns out that public finance management is a lot harder than most people think. Don’t expect people to be honest and patriotic. Help design PFM systems that are robust to the worst of thieves.

Here, too, I would suggest a move towards mainstreaming resource sector transactions into the normal appropriation processes. For instance, the administration can introduce greater transparency in the oil business, and create stronger links between oversight authorities in the host countries and the American firms involved. This will not end corruption, but it will serve to disperse power within the oil producing countries. And that would be a good thing.

Also, a quick reminder that AGOA involves more than just oil. Africa’s tiny textiles sector benefits too. Doing more to develop this sector would create tens of thousands of jobs, thereby reducing aid dependence.

We’ve been hunting Kony for years, is it worth the effort?

Nope.

The LRA has never attacked U.S. interests, why do we care? Is it worth the huge cash outlays? I hear that even the Ugandans are looking to stop searching for him, since they no longer view him as a threat, so why do we?

I have no idea.

May be this has been used as a way of maintaining ties with the Ugandan military in exchange for continued cooperation in central Africa and in Somalia? May be it is a secret training mission for the U.S. military in central Africa?

I honestly have no idea.

Is PEPFAR worth the massive investment when there are so many security concerns in Africa? Is PEPFAR becoming a massive, international entitlement program?

PEPFAR has saved millions of lives. And I would argue that it is probably America’s most important investment in soft power across Africa.

I would suggest a few modifications, though. The new administration should think creatively about how to use PEPFAR dollars to strengthen African public health *systems* in a manner that will allow them to provide effective care beyond HIV/AIDS. Malaria and GI diseases kill way more people. These need attention, too.

How do we prevent the next Ebola outbreak from hitting the U.S.?

By strengthening public health systems in countries that are likely to experience Ebola outbreaks.

The Elusive Quest to Fix (Political) Governance Problems Using Technology

File this under “the perils of treating political problems as technical problems”:

The government’s main financial management system is marred by technology loopholes, making it prone to abuse and possible loss of public funds, an official audit has revealed. An inquiry report by the Auditor- General reveals that the Integrated Financial Management Information System (Ifmis) has numerous control weaknesses that badly expose it to fraud and misuse, with unidentified users capable of logging in remotely while others have multiple identities in the government’s main financial nerve centre.

So exposed is the system that one can create more than one User ID. This can lead to misuse of such additional User ID freely in committing fraud. The audit reveals that almost 50 users had more than one User ID leaving little accountability on the users. The system also lacks a trackable approval process in the creation of new User IDs, meaning it is possible to create ghost IDs and carry out transactions including remotely without being noticed.

In fact, a list of authorised personnel provided with remote access was not available for audit review meaning their identities remained anonymous. There was no practice of approving the remote login requests; which means even those not authorised would log in remotely. Remote transactions were largely blamed for the theft at the Ministry of Devolution which saw the loss of more than Sh1.6 billion in the infamous National Youth Service (NYS) scandal.

Vendors were also duplicated in the system with a review of the supplier master data showing the existence of almost 50 cases of duplication of the same vendor, meaning the vendor may as well have been paid 50 times.

Elections 2017: David Ndii makes a rather weak case for new wine in old wineskins

This is from the Daily Nation:

The idea that political alternative necessarily means different or new people is a fallacy.

One of the most bizarre moments in my political life was walking into the Serena Hotel’s ballroom for a cocktail to celebrate the formation of Narc, and scanning the room to see Kanu stalwarts George Saitoti, Joseph Kamotho and William Ntimama mingling and laughing heartily with their erstwhile mortal political enemies.

It was the strangest and most confusing feeling.

I stayed only a few minutes and went home quite depressed.

I had the privilege of working with Saitoti thereafter and I have to say he turned out to be one of the most committed and progressive ministers in the Narc government.

“If the opposition is not an alternative” had obtained in 2002, Narc could not have been an alternative to Kanu because even its presidential candidate was a long time Kanu stalwart who once compared felling Kanu with trying to cut down a mugumo tree with a razor blade.

Yet it is undeniable that Narc’s election was a watershed in our political history.

More fundamentally, the narrative glosses over the fact that we have a very clearly defined ideological cleavage in this country that goes back to the Kanu-KPU fallout shortly after independence.

Opposition in Kenya means opposing the Kanu establishment. It means standing up for political equality and social justice.

I am not convinced. For two reasons.

First, I have always found issue with depictions of Uhuru Kenyatta as a latter day Moi (or wannabe dictator). He is not. In my view Kenyatta is simply a poor administrator with a thin skin and lots of sycophantic lieutenants (not to mention a very ambitious deputy). Combine these together and you get lots of failures at different nodes of the administration; and lots and lots of stealing (the definition of a common-pool problem). Is Kenyatta himself corrupt? Perhaps. Does he have a masterplan for taking us back to the baba na mama era? I doubt it.

This doesn’t absolve Kenyatta of any of his failings highlighted by Ndii. It certainly sucks to live in a poor country on autopilot and with an “absentee-landlord” president. Rather, it’s a call for a proper diagnosis of the real causes of the failures of the Jubilee administration.

Second, the ideological commitments of members of the opposition are sketchy. When its leading lights were in government (briefly after 2003 and then after 2008) they did not behave any differently than the alleged Kanu Establishment (with the possible exception of Charity Ngilu). Just because Raila Odinga claims to be a social democrat doesn’t mean that we should believe him. His actual track record suggests that as president he would probably be somewhere between Jomo Kenyatta and Kibaki in style — able to delegate, primarily pro-business, big on elite-level ethnic regional balance, but also keen to use coercion when necessary (which is why I am always amused by Railaphobia scaremongering that depicts the man from Bondo as a rabid anti-wealth, pro-poor socialist. Look at the man’s record. He is no more pro-poor than is Kenyatta).

Musalia Mudavadi, who stands the best chance of beating Kenyatta this August atop a united opposition ticket, is essentially a scion of the Kanu Establishment.

Change for the sake of change is not always a good thing.

The case that an opposition government would be less corrupt, more competent in managing the economy, and more inclusive than Jubilee is fairly weak. After nearly fours years under the system of devolved government, the opposition’s record on actual policy performance is paper-thin. Their governance record is nothing to sing about. For instance, CORD controls the big urban counties of Nairobi, Mombasa, and Kisumu. Wouldn’t it be nice if they had something to point to as evidence of their administrative and policy competence? Where does the opposition stand on agricultural policy? Health policy (do they even know that there is an ongoing doctors’ strike)? Education policy? Housing and land policy?

Can we really say with a straight face that the leadership of opposition counties have sought to channel Oginga Odinga, Kaggia, JM, Pinto, Murumbi, or Seroney in their policies? Does the Kenyan left even exist anymore among the political class?

The Jubilee government has failed on many fronts, and ought to face a strong challenge come August. But the Kenyan public shouldn’t be expected to hand the opposition the keys to State House simply because they are in the opposition. They must first show wananchi what is in it for them. They must demonstrate that they get the issues that affect the proverbial number of sufurias in Kenyan homes.

PS: This is not some starry-eyed case for a third force. Rather it is a call for more rigorous arguments for either reelecting Jubilee or voting for the opposition from their respective intellectual backers. I am a big believer in making do with the politicians we have.

PSS: It is sad that 2017 will not be about the counties. It ought to have been about the counties. And bringing government closer to wananchi.

Electoral Integrity Issues Ahead of Kenya’s General Election in August 2017

1. Raila Odinga won the 2007 presidential election, at least according to aggregate results from media houses. On a related note, President Kenyatta will most likely face a stiff challenge from a unified opposition, a fact that will put the integrity of the outcome in the August 8th presidential election front and center. Which is why it is a little scary that with just eight months left Kenyans are still fighting over the impartiality and preparedness of the country’s electoral management body, IEBC. It is also worth noting that there is a non-zero probability that Raila Odinga will not be on the ballot this August; and that this would do very little to reduce the likelihood of electoral violence if the polls lack integrity.

2. Kenyan governors have rejected the proposed manual backups for the electronic voter verification system in the August 8, 2017 General Election. This issue threatens to plunge the country into a period of heightened political tensions over the next several weeks, with the opposition having promised street demos if the government doesn’t soften its stance. There is still hope that cooler heads will prevail in the Senate and deliver a consensus outcome.

3. The Independent Electoral and Boundaries Commission (IEBC) is about to be reconstituted. Ethnic Regional balance issues remain. These are rather silly. Ezra Chiloba, the current IEBC CEO, is a very capable man and it would be a shame if he were to lose his job simply because of the lottery of birth.

4. KPMG will audit the voter register which currently has 15.85 million listed voters. Through a court challenge the opposition has temporarily stopped the award of the tender to KMPG. CORD is claiming that not enough stakeholders were involved in the tendering process. I suspect that the real reason is that CORD does not trust KPMG to do an honest job. It bears stating that private firms, including big-name multinationals, have historically not been above being compromised by sectional political interests in Kenya.

On a side note, most observers seem to think that the biggest political career on the line in 2017 is that of Raila Odinga. I disagree. The biggest political career on the line in 2017 is that of Deputy President William Ruto. Politically speaking, Ruto is between a rock and a hard place. He will wield immense political power, and have control over his political future, right up until the August 8th election is decided. Thereafter he will lose control over his political future.

If Kenyatta wins, he will immediately become a marked man. Five more years as number two will definitely grant him access to even greater financial resources and ability to bolster his political power. But it will also invite the envy of fellow elites wary of having to face a powerful and self-disciplined politician like only Ruto can be. In my view, Ruto has the potential to be Odinga and Moi rolled into one — i.e. fanatical mass support and incredible self-discipline and work ethic. Needless to say, this scares a lot of Kenya’s fat cats who’ve grown used to the absentee-landlord nightwatchman presidency of Kenyatta. There is also the small matter that Kenyatta’s base will likely not support Ruto in 2022 for this same reason.

If Kenyatta loses Ruto is toast. The music will stop. The cash spigot will be turned off. His ties to voters and grassroots leaders — which at the moment is almost purely transactional and dependent on incredible levels of personal generosity — will most certainly evaporate. His political base will likely be carved up by rivals, with Bomet’s Ruto and Gideon Moi hiving off their separate chunks for use as leverage for political favors and financial resources from Nairobi.

Ruto’s best chance at winning in 2022, IFF Kenyatta wins this year, is to convince Kenyatta to step down before his second term expires. That way Ruto can serve the remainder of Kenyatta’s term and run in 2022 as an unbeatable incumbent president. Show me a Kenyatta associate who would want to see this happen and I’ll show you a liar.

Of course there is also the possibility that Ruto looks down the game tree, does not like what he sees, and decides to make this year’s election a little more interesting than most people anticipate.

 

India scraps high denomination notes

India’s Economic Times reports:

In a move to curb the black money menace, PM Narendra Modi declared that from midnight currency notes of Rs 1000 (Kshs. 1500) and Rs 500 (Kshs. 750) denomination will not be legal tender. People can deposit notes of Rs 1000 and Rs 500 in their banks from November 10 till December 30, 2016.

…. However, he said that all notes in lower denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid.

This is an interesting move that will likely improve the Indian government’s ability to monitor cash movements in the economy. A while back Kenya’s central bank introduced rules requiring paperwork for any cash transaction above US $10,000. India’s move goes well beyond this.

Here is Tyler Cowen’s reaction over at MR:

This is a big deal as these notes account for at least 80% of all cash in circulation! Ken Rogoff has argued for eliminating cash but this doesn’t seem to be a move in that direction since the notes will be replaced with new Rs 500 and Rs 2000 notes. Rather it seems to be a wealth tax on the black market. Old notes can be turned into a bank for replacement so ordinary people won’t lose money. People in the black market, however, probably have a lot of cash that they are unwilling to turn into a bank because they don’t want to reveal their wealth. Imagine walking into a bank and depositing a million dollars in cash–that is going to create a record that the tax authorities can follow. The wealth tax on the black market interpretation is consistent with the surprise–if people knew that this was coming they could have laundered the money but that is going to be more difficult and costly now.

It’s impressive that a government could pull off this level of secrecy. Good for Modi’s image as competent, uncorrupt and technocratic. Indians are calling it a “surgical strike on black money” which is the imagery Modi wants. But what will happen tomorrow when people don’t have enough cash to buy goods and services?

Would the Kenyan government be able to successfully pull off a surprise policy move like this? Certainly the country would probably benefit given all the bags of cash floating around.

Variagated Africa: Trends in Economic Performance in Two Charts

This is from the IMF’s Monique Newiak:

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In summary:

Non-commodity exporters, around half of the countries in the region, continue to perform well with growth levels at 4 percent or more. Those countries benefit from lower oil import prices, improvements in their business environments, and strong infrastructure investment. Countries such as Côte d’Ivoire, Ethiopia, Senegal, and Tanzania are expected to continue to grow at more than 6 percent for the next couple of years.

Most commodity exporters, however, are under severe economic strain. This is particularly the case for oil exporters like Angola, Nigeria, and five of the six countries from the Central African Economic and Monetary Union, whose near-term prospects have worsened significantly in recent months despite the modest uptick in oil prices. In these countries, repercussions from the initial shock are now spreading beyond the oil-related sectors to the entire economy, and the slowdown risks becoming deeply entrenched.

It should be obvious, but it bears repeating that there is quite a bit of variation in economic performance across the 55 states on this vast continent.

My personal Africa growth index consists of Senegal, Cote d’Ivoire, Nigeria, Ghana, Gabon, Cameroon, Ethiopia, Kenya, Zambia, Angola, and South Africa. And despite ongoing turbulence in a number of the key economies in this basket, I am confident that the turbulence will not completely erase the gains of the last two decades.

 

How to Eliminate Malaria

Sri Lanka is the latest country to be declared malaria free by the WHO.

How did they do it?

According to the New York Times:

In 2000, outside the rebel-controlled areas in the northeast, malaria cases began dropping as the government, with donor help, deployed a mix of indoor spraying, bed nets, rapid diagnostic kits and medicines that combined artemisinin, an effective treatment, with other drugs.

The government also screened blood samples drawn — for any reason — in public clinics and hospitals for malaria infection, and officials established a nationwide electronic case-reporting system.malariaeradication

In war-torn areas, the disease retreated more slowly, although the Tigers often cooperated with malaria-control teams because their villages and fighters also suffered.

Nonetheless, in a population of 20 million, it took years to get rid of the last few hundred annual cases. Most were soldiers and itinerant laborers, often from India, who worked in remote slash-and-burn farming areas and in logging and gem-mining camps.

Someone tell African policymakers that bed nets and behavior change are not enough.

Every other region of the world appears to be willing and able to combine vector (mosquito) control with other strategies of containing malaria with success (and enthusiastic donor support). But for some reason mosquito control is still lagging in Africa, even in otherwise strong and stable states. In some instances this has been due to environmental concerns while in others it has been due to the misplaced priorities of public health officials, donors, development agencies, and academic researchers.

The result:

About 3.2 billion people – nearly half of the world’s population – are at risk of malaria. In 2015, there were roughly 214 million malaria cases and an estimated 438 000 malaria deaths. Increased prevention and control measures have led to a 60% reduction in malaria mortality rates globally since 2000. Sub-Saharan Africa continues to carry a disproportionately high share of the global malaria burden. In 2015, the region was home to 89% of malaria cases and 91% of malaria deaths. 

214 million malaria cases amount to lots and lots of lost productivity. Also, losing one Miami every year in deaths is simply unacceptable.

More on this here. 

South Sudan: A runaway kleptocracy or a gradual evolution towards statehood with an encompassing interest?

The Sentry, a project co-founded by George Clooney and John Prendergast, has a nice report that details corruption at the highest levels of the South Sudanese government.

How do President Kiir’s children afford to live in such apparent luxury? Corporate records for Combined Holding Limited (CHL), a South Sudanese holding company incorporated in February 2016, provide one clue. These records reveal basic information about the company: the date of incorporation, names of shareholders, their contact information and a copy of their passport. One of CHL’s shareholders is a 12- year-old child with the surnames “Salva Kiir Mayardit” whose passport lists his occupation as “Son of President.” But, this hardly makes this child unique among members of President Kiir’s immediate family.

In total, The Sentry found that at least seven of President Kiir’s children have held stakes in a wide range of business ventures, especially in the extractive and financial sectors. Corporate filings obtained by The Sentry show that South Sudan’s first family appears to be active in the country’s oil and mining industries. Another document obtained by The Sentry, dated June 26, 2015, indicates that Thiik Kiir—the president’s 28-year-old son—owned 35 percent of Nile Link Petroleum. Adocument filed in 2014 lists Mayar Kiir—Thiik’s 29-year-old brother whose passport also confirms he is the president’s son—as owner of half of Oil Line & Hydrocarbons Limited, with the remaining shares held by three Kenyan businessmen.

A document dated May 25, 2015, lists Mayar Kiir as a 50 percent shareholder in Specialist Services Co. Ltd., a company that describes itself as being involved in “oilfield services and petroleum supply.” Another document indicates that Adut Salva Mayar, the president’s daughter, has owned shares of Rocky Mining Industries Limited. Yet another document reports that Anok Kiir, President Kiir’s 29- year-old daughter, has held a 45 percent stake in CPA Petroleum. And, according to another corporate record, Winnie Salva Kiir, the president’s 20-year-old daughter, held an 11 percent stake in Fortune Minerals & Construction. The same document indicates that, as of March 2016, the three largest shareholders of Fortune Minerals are Chinese investors.

You should read the whole thing here.

You’d be interested to know that Salva Kiir and Riek Machar live screen-shot-2016-09-12-at-4-55-03-pmonly a short drive from each other in Nairobi, Kenya.

The idea that the leaders of South Sudan are stealing state resources left, right, and centre is totally abhorrent. Tens of thousands have died since the resumption of civil conflict. Millions are in dire need of humanitarian aid.

The international community has its work cut out for it. South Sudan lacks a functional state apparatus. It is yet to get to the point of stationary banditry.

Which is why I think that it would be misguided to presume that the key problems with South Sudan are endemic corruption or the lack of “good governance.”

Should we really expect the president of a (struggling) oil producing 5-year old state to make $60,000 a year and not dip into state coffers once in a while? After all, Kiir’s *perceived* peers are likely not some low-level bureaucrats here in DC but other leaders of the world and the Davos crowd. This is not to say that if Kiir were paid more he would necessarily be less corrupt. The point is that I am not particularly shocked that Kiir and his collaborators in the pillaging of South Sudan want and have acquired the same material comforts that most leaders in the world have.

The historically inclined might even argue that this is South Sudan’s enclosure movement.

Should one take that view, then the solution to the current problem would not be the *relative* impoverishment of the South Sudanese putative “upper class,” but investments in the expansion of this social category so that there is sufficient intra-elite accountability across the different socio-cultural groups in the country. The strategy of integrating rebel leaders into the SPLA could have served this purpose, but the downside is that it incentivized the proliferation of warlordism in the hope of being bought off by Juba.

Perhaps one of the most important questions to ask about South Sudan is how the international community can help Kiir and his henchmen invest their (ill-gotten) wealth in Juba instead of Nairobi or Kampala.

If left alone, South Sudan will likely remain to be a runaway kleptocratic failed state instead of gradually moving towards a stable state with sufficient coercive powers.

The student of the political economy of institutions in me is somewhat convinced that horizontal intra-elite accountability is probably the best way out for South Sudan (if they can establish intra-elite political stability to begin with). The hope that vertical accountability through regular “free and fair” elections will help keep a globalized elite running a fractious post-conflict state honest and accountable is phantasmic. At the moment the domestic audience costs for engaging in corruption are very low for Kiir and other elites, and will likely stay that way for the foreseeable future.

And don’t even mention “political will.” There are no “good” leaders in the world. Just properly incentivized individuals.

Again, definitely read the report.