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September 25, 2018

Bad policy not graft our problem

White elephants
White elephants

Tales of grand corruption have dominated all media coverage for the past fortnight.

From the National Youth Service to Kenya Power to Kenya (Oil) Pipeline Company to the National Cereals and Produce Board — just about any large governmental institution has come up for mention. And especially those that were of critical significance to a vulnerable population cohort (eg the young people who saw their future tied to joining the NYS) or to a key subsector (like the maize growers in Rift Valley who had hoped to deliver their harvest to the NCPB.

These are all cases of the hopes of ordinary Kenyans being destroyed by a parasite class of profiteers whom Kenyans loosely refer to as ‘the cartels’.

Reading or listening to these reports, it would be easy to share in a widely repeated conclusion: That if there were only some way for us to effectively end such grand corruption, then the nation would flourish and prosper.

But this is not really true. The most devastating actions and decisions made by our leadership do not relate to inflated supply contracts or to fraud in procurement departments — outrageous as these may be.

Policy failures — and especially when they involve white elephant projects — are far more destructive, and usually lead to much greater losses. But as these are not easy to outline in the satisfying imagery easily applicable to grand theft, they often go unnoticed.

Consider a project which many Kenyans look on with pride: The standard gauge railway.

The policy priority here, rationally, was not that of boosting local tourism. Rather, it was to reinforce our position as the key regional transport hub in East and Central Africa.

The vision here should have been one of thousands of containers leaving the Port of Mombasa and bound inland — not of hundreds of happy families heading for the Coast on the Madaraka Express.

Here is how the BBC reported this ‘good news’ in June 2017:

“…At $5.6m per kilometre for the track alone, Kenya’s [new railway] line cost close to three times the international standard and four times the original estimate…

“Cost comparisons have been made between this line and Ethiopia’s 756km Addis Ababa-Djibouti line…Both are standard gauge railway (SGR) projects financed by Chinese loans, costing $3.4 billion, (Sh340 billion approx) for Ethiopia and $3.2 billion (Sh320 billion) for Kenya…Ethiopia’s line is more than 250km longer and is electrified, which is typically more expensive; trains running on Kenya’s line will be diesel-powered.”

Now it is bad enough that this SGR was apparently built at a cost of roughly “three times the international standard” (which with these figures, would suggest a loss of about Sh200 billion). But worse still, it is not functioning as it is supposed to.

Not that long ago, Minister for Transport and Infrastructure James Macharia went on record ordering importers to use the new SGR voluntarily — or else they would be compelled to use it. And reports have since followed of importers who had arranged to have their cargo delivered only up to Mombasa, finding that their goods were awaiting them at the Kenya Ports Authority’s Embakasi Inland Container Depot in Nairobi.

This is brought about not by disorganisation, but by panic that if the new SGR is shunned by importers, then there will be no revenues from its use with which to pay off the huge Chinese loan that made its construction possible.

China-bashing has become somewhat popular in the Kenyan media, with suggestions that we are heading towards a financial cliff by taking all those loans from China. But much of it is as misplaced as the allegation often heard in some parts of the US that “the Chinese have taken our jobs.”

It was the Chinese, after all, who built the Thika Superhighway. And though this key highway has imperfections in design as in construction, Kenyans did not have to be begged or coerced to use it, as is now happening with the SGR.

The real problem is not the Chinese (or any other “foreigners”) but the policy failures of our leadership.

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