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December 14, 2018

Policy Execution Eclipsed By Rampant Corruption

Treasury Cabinet secretary Henry Rotich. Photo/File
Treasury Cabinet secretary Henry Rotich. Photo/File

There’s been so much back and forth with the Eurobond story, but what still baffles me beyond the details of the payments and transfers: the honourable Treasury Cabinet secretary Henry Rotich himself. This is his docket. This is what he gets paid for. He’s Kenya’s main man for the country’s finances. And still, it’s been weeks, and his story constantly changes. Maybe you stumble once, but given the sums of money involved here, you then have the story straight, no?

But even without the Eurobond, corruption had a media day recently. In an interview with the Dutch Handelsblad, Chief Justice Willy Mutunga described Kenya as a bandit economy: 'The country’s citizens are at war with mafia-style cartels run by political bosses and corrupt businesspeople. (..) Larger cartels, he explains, make money through trafficking illegal migrants, counterfeit money, weapons, drugs and consumer goods.'

I wasn’t greatly surprised by what he said - only that he did say it. But maybe his impending retirement makes him feel more at liberty to be frank. Politics, public institutions and crime are so interwoven that it is difficult to see how any pushback is still possible: '(the cartels) are doing illegal business with politicians. If we do not fight the cartels, we become their slaves. But leaders who do take on the cartels must be prepared to be killed or exiled. (...) But as long as I fight the cartels and they are protected, you cannot achieve anything. You are taking these people into a corrupt investigating system, through a corrupt anti-corruption system, and a corrupt judiciary.’

And then Transparency International published their annual corruption perception index. It is difficult to go up against Nigeria: such a big country, so many people, so much oil, so much experience! But Kenya did it, alongside Uganda. Both countries were ranked 139 out of a total of 168 (one being best, and 168 worst). Nigeria, clearly slacking these days, ended up on 136. TI score countries from 0 (highly corrupt) to 100 (barely corrupt), and Kenya received a score of 25, below the sub Saharan Africa average of 33.

A bit more surveying; the Aga Khan University’s East African Institute just published the Kenya Youth Survey Report. The survey shows how, well, pragmatic the younger generation has become – from an article in the Star: ‘According to the report, 50 per cent of the youth believe that it doesn’t matter how one makes money as long as one does not end up in jail, while 47 per cent admire those who hook or crook (including hustling). Only 40 per cent believe that it is important to pay taxes. When it comes to corruption, 30 per cent of the youth believe graft is profitable and a further 35 per cent would readily give or take a bribe. This is also connected to the level at which the youth react to politics and electoral bribery, with 40 per cent saying that they would only vote for a candidate who bribed them.’

I’m sure there is a lot to unpick here, but ultimately, both in public services and in elections, corruption has become institutionalised, the norm, the fabric. And this is, the report says, the most educated Kenyan generation to date (yes, lots to unpick about the concept of education, too). If you steal a chicken, you might end up being beaten to death. But if you steal millions, you’ll be hero worshipped.

Again, none of this surprised me much (What did irritate me, however, was one media house writing that not all was gloom and doom as the respondents also cared about family and religion. I had always thought that ethics was part of religion – the whole not-stealing bit?).

Does this really tell us anything new? Probably not. In public, everyone will make the requisite noises about governance. In private, or possibly not so private, the small people will hustle. The big people will meet in expensive clubs to discuss ‘what we can do together’. As my friend Aleya writes: ‘We currently live in a country of no consequence. Every day people are exposed for fraud so mind boggling massive our brains can’t wrap itself around the enormity. Every day people are literally stealing the future from our children. And absolutely nothing happens to them.’

I had been asked about political scenarios recently, and it occurred to me, for any investor, the biggest risk of a substantial change in government is not, in fact, a change in policy. For that, you’d have to have established parties that have an internal think tank so that they can actually develop policies. Policies based on research and data and knowledge. A Powerpoint presentation with a ‘vision’ is not policies. The biggest risk to an investor in case the government composition changes is that people will be replaced, and new arrangements with new people will have to be found. What Kenya has in terms of policies – and in that respect, it often does reasonably well on a continental level – sits in institutions and with technocrats. It’s the people implementing them that trip them up.

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