By Kevin Motaroki
The surest sign that there is something fundamentally wrong with the path the country is taking is if its people are overwhelmingly pessimistic about their odds. Odds of landing a job, of eating a decent meal, of getting their children a proper education, of buying gods and services at reasonable prices. An Infotrak survey in June showed at least 48 percent of Kenyans feel the country is on the wrong trajectory. It is gloomy news in almost every way.
Kenya’s official unemployment rate stands at 12.2 percent as of 2018; some sources quote higher figures. Out of a population of 46.2 million people, 6.6 million are economically inactive, and 1.9 are unemployed. These are World Bank statistics as of May 2019. The Kenya National Bureau of Statistics puts the number of unemployed Kenyans at 7 million, with a 7.4 rate of unemployment.
The World Bank estimates the number of skilled, working-age population will be 21 million by 2020 – about 45 percent of total population. By 2030, this figure is projected to be a staggering 39 million people. An Institute of Economic Affairs report of 2014 puts the country’s total recorded employees at 11.5 million, with the majority of these in the informal sector – 9.4 million. From 2010 to 2014, the number of employees in the formal sector increased from 2.1 million to 2.5 million, representing an average increase of 4.4 percent per year within the period, which translates to 96,800 formal jobs annually. On the other hand, the number of employees in the informal sector increased from 9.4 million –11.8 million. This represents an average increase of 6 percent per year which translates to 618,100 informal jobs annually.
Government, at pains each fiscal year to present compelling reasons for failing to directly create jobs for its people, or facilitate job creation. Between 2015 and 2017, the Jubilee government promised “to create 530,000 new jobs in the formal sector” – which would mean quadrupling the pace of job creation in this sector alone. To do this, it would need policies to promote faster growth in the formal economy –highly productive but not big enough to accommodate the 500,000 new entrants into the job market every year – as well as encourage workers in the larger but comparatively less productive informal economy – in terms of revenue – to transition into more formal employment.
When Treasury CS Henry Rotich came to parliament to present the annual budget in June 2018, among the reasons he gave for the economy’s slowing down and rising levels of unemployment were a difficult economic environment – without specifying what the difficulty was – a slow-down during the general election of 2017, arising from post-election chaos, tension and uncertainty – government technocrats could not, for all they are worth, account for this – and a slowdown of economic activity – on account of either the first or second reasons, or both. Government had failed to create even a tenth of the jobs it had promised. These reasons are often repeated by politicians, including President Uhuru Kenyatta, whenever asked questions about the state of the economy. At best, the President, like his deputy, lilies with a lilied brow and without batting a lid – much like he did with NTV’s Mark Masai when Uhuru hosted journalists for an end-of-year brief in Mombasa in December 2018.
It is no better when government attempts to regulate existing businesses. Kenya’s underground economy is vibrant, but, as the World Bank notes, establishments tend to stay small, with owners avoiding “cumbersome registration procedures” and other regulations that come from operating officially.
If we can forgive stating the obvious, Kenya’s rapidly expanding workforce isn’t finding jobs fast enough. According to a 2018 World Bank report, “Unemployment and underemployment are rampant, especially among the youth.” Put simply, job growth has failed to keep up with economic growth, which is why East Africa’s largest economy cannot produce 100,000 jobs annually, or even surpass the rate at which jobs were created under the Mwai Kibaki regime. Even if the economy could produce jobs in these numbers, they wouldn’t be enough to even cover half of the gap between the growth in jobs and the working-age population.
In the report cited in the preceding paragraph, World Bank thinks Kenya’s aspirations of becoming an upper-middle-income country — a group that includes South Africa, Mexico, Thailand, and Turkey — by 2030 is a “farfetched” dream. Why, you ask? Its underachieving labour market, to a large extent. According to the report, even where jobs actually exist, too many workdays are lost to labour disputes, with the country’s minimum wage pushing people into the informal sector – this, even as it is concurred that Kenya’s minimum wage, both in absolute terms and relative to worker productivity, is higher than countries at a similar stage of development.
But this is only one part of the problem. There is theft, official theft to be precise, in absolute and unflinching, shameless terms, sanctioned and tolerated from the highest echelons of government ranks.
Corruption Tracker, “an online archive of corruption stories in Africa”, has documented 142 known scandals beginning 2004 which reveal the eye-watering figure of Sh6.92 trillion of money stolen, misused. This translates to a conservative figure of Sh461.4 billion every year (some recent estimates have placed the annual average at more than Sh1 trillion annually).
Numbers from the periodic annual reports by the Auditor General in recent times reveal that, on average, more than Sh1 trillion was lost, misappropriated or stolen outright since 2014. The tracker records that in 2018 alone, a dozen projects consisting of hospitals, markets, property abroad, courts, and stadia, among others, stalled. Their combined value is Sh15.4 billion.
A report published in the third quarter of 2018 revealed that Kenya’s super-rich are holding more than Sh5 trillion in offshore tax havens across the world. The individuals, who the report by American think tank National Bureau of Economic Research did not name, form the cream of Kenya’s wealthiest, and mostly use the offshore accounts to hide ill-gotten trillions, evade taxes and steer clear of Kenyan laws.
A properly functioning government machinery is one that enables citizens to reap the benefits of the constitution, the opportunities within their national and international boundaries and progressive social policies. A non-functional one harms the vulnerable; this is what we seem to be chained to. This would also seem to speak to the nature of our politics, as it raises serious issues with participatory democracy in the state and the inability of ordinary actors to directly hold the state/government to account.
A culture of impunity has led to State capture of lives, means to livelihoods and projects, as well as a lack of accountability to the people by those in power. Today, national policy is often not driven by evidence; instead, localised, inappropriate and selfish metrics of performance are applied. It is why, for instance, legislators have become so emboldened as to pass laws to increase their wages two-fold to Sh2 million, in a country that has more than Sh4 trillion in external debt, and where minimum wage is Sh13,000. The result of this is that we cannot reconcile the inequalities we know and experience with the reality of what goes on in ‘higher places’.
Without going into the textbook definition of bad governance, it is evident that the reasons for poor governance and “bad” politics in Kenya – as elsewhere – are also the results of it: personalisation of rule or office, neglect by the state to advance and protect human rights, the tendency of citizens to “withdraw” from politics by refusing to take an interest in how they are governed, and the extreme centralisation of power in the hands of few people (and tribes).
Democracy further takes a hit because the state seeks, and often succeeds, in controlling the economy; as a result, the only way to get rich is through political office – both by the salaries that our politicians seek to increase every time we elect them, but largely through selective tendering, graft and kickbacks – thereby intensifying the problem of corruption, and inducing leaders to cling to political power. This has been our one enduring disaster, politically and economically. The solution would be economic liberalisation, to empower ordinary producers. Yet, we constantly refuse to follow this path.
The same families have ruled Kenya since independence – only the pecking order varies. They straddle every sphere of economic and political influence. This small number of Kenyans with power has managed to erode any semblance of accountability to the masses and, with it, hogged the limits of legitimacy, democracy and justice. Those involved in planning and policy-making in government will tell you this is a constant source of considerable disappointment to their work.
Because priorities are determined elsewhere, efforts to collectively attack poverty, disease, illiteracy, and other challenges to development are constantly overridden by personalised concerns. For this reason, popular participation in governance, accountability and transparency, the elimination of corruption, the protection of freedom of information and human rights, and, importantly, decentralisation and devolution of power, continue to be a farce.
Bad governance, including, corruption poses a profound threat to all systems of government. In ‘Democratisation in Africa: African Views, African Voice’ (1992), Sahr John Kpundeh notes that in most African countries, corruption constitutes an important means by which individual wants and needs, especially in patronage-ridden personal regimes, can be satisfied. In some countries, Kenya included, it is so extensive that it is viewed as a way of life. Because of an absence of effective structures with autonomy and strength to check corruption, the governing elites in Kenya engage in high and egregious levels of corruption, increasingly diverting state resources for personal gain. The joke goes that corruption is now a structural fact, with as much as 60 percent of the annual budget misappropriated by the governing elite. Neither is foreign aid spared; it serves as an alternative source of wealth for the elites.
The dreadful impact of corruption on the effectiveness and efficiency of service delivery by government necessitates an examination of the capacity – or willingness – of institutions to carry out their role and mandate effectively. The cause of the economic malaise – both in terms of labour and corruption – is not about factors outside of government; it lies in the government, particularly its leadership, and its lack of willingness to grasp an ingrown nettle and root it out. (