Monthly Archives: April 2017

Lessons from Kaundanomics

A story is told that a few years after independence in 1964, Kenneth Kaunda, Zambia’s first president, visited one of the mines in the mineral rich Copperbelt Province and was immediately struck by the complete absence of Zambians in senior management positions.

He proceeded to ask the mine owners as to when they reasonably thought Zambians would be ready to occupy positions of influence within the country’s mining sector. With straight faces, the mine owners responded “not before 2003, Mr. President.”

Following independence from Britain, Zambia’s economy was organized broadly along capitalist free market lines. The economy, split up into mining and non-mining sectors, was wholly in the hands of foreign private interests. The copper mines, the country’s jewels, were owned a 100% by Anglo American Corporation and American Metal Climax. Both companies having obtained the rights to mine copper in perpetuity from Cecil Rhodes’ British South Africa Company (Rhodes had himself obtained the mining rights under dubious circumstances). The non-mining sector – including banks, insurance companies, construction companies and so on – were similarly in the hands of foreign interests.

The logic, or at least hope, in organizing the economy in this way was that unfettered foreign capital would not only drive productivity improvements at home, including knowledge and technological transfers, but would, crucially, play a big role in meeting the newly independent country’s social expenditure targets. The latter point was of vital importance given that the colonial government had disproportionately privileged whites in the provision of social services.

Unsurprisingly, unfettered foreign capital did the exact opposite. Instead of re-investing a considerable proportion of their profits in local operations, the mining companies externalized almost everything. Before independence, mining companies had re-invested about 50% of their profits in Zambian operations. After independence, the rate of re-investment fell to about 20%, according to estimates by Oliver Saasa, a Zambian development expert.

Things were not any better in the non-mining sector. Saasa estimates that the outward remittance of dividends to foreign owners increased by 84% in 1966, two years after independence. As for the commercial banks, they continued just as before to favor resident Europeans in the provision of credit facilities. Only 15% of bank credit was extended to Zambian citizens, a move that constrained the emergence of an indigenous entrepreneurial class.

In as far as funding the state purse was concerned, the mining and non-mining companies utilized all manner of gimmicks, including “invisible costs,” to ensure that their tax liabilities in Zambia were kept to a bare minimum.

It very early on dawned on Kaunda and his team that “the encouragement of private investment inevitably meant the promotion of the dominance of foreign enterprises in the productive sectors of [Zambia’s] economy.” Rather than be engaged in a never-ending game of dubious logic with the foreign capitalists, Kaunda decided to act.

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By Grieve Chelwa

Picture credit: Rodger Bosch/Getty Images.


JOHANNESBURG, President Jacob Zuma has signed the Financial Intelligence Centre Amendment (FICA) bill into law. The Financial Intelligence Centre Amendment Act, assented by the President, amends the Financial Intelligence Centre Act, 2001. The 2001 Act…

Where exactly is Kenya’s 5.8 per cent growth?

Although relatively better off than its neighbours, Kenya remains a struggling economy dominated by foreign-owned tourism, agriculture, the services industries and a small manufacturing sector stunted by huge imports and counterfeits. Endemic corruption, increased integration into the global capitalist economy and neoliberal policies that favour a small fabulously rich class have conspired to hold the majority of citizens tight in the jaws of poverty.

The numbers are in, but who cares? According to the Kenya National Bureau of Statistics (KNBS), a government agency, East Africa’s largest economy grew by 5.8 per cent last year, a slight rise from 5.7 per cent the previous year. But only Planning Minister Mwangi Kiunjuri was excited when he presided over the release of the figures last week. “This growth was achieved through the government’s commitment in creating an enabling environment for doing business in key areas”, he crowed.

Nobody else saw anything to rejoice about. Pro-government media like Nation’s attempt to splash the news fell flat. The country is so consumed by the rather violent and shambolic party nominations ahead of general elections in August that no one seems to care about government stats. Moreover, it is the norm in Kenya that any matter regardless of its importance would only attract considerable public attention when some big politician decides to go to town on it. But more to the point, there aren’t many people in Kenya who can tell you what a GDP growth of 5.8 per cent did for them personally or their relatives and friends last year. Several opinion polls in recent years have consistently indicated that the number one concern for Kenyans is the very high cost of living.

The 5.8 growth figure isn’t a big deal in another important respect. According to the government’s blueprint, Vision 2030, the economy should be growing at a steady average of 10 per cent to transform Kenya into a middle-income industrializing nation. Now, the highest annual GDP growth rate witnessed in Kenya for more than thirty years is 7.1 per cent in 2007. With only 13 years to go, Vision 30 is a mirage. And the details of the latest survey reveal the utter emptiness of the prosperity rhetoric the Uhuru Kenyatta administration feeds the masses.

A key highlight of the survey is creation of jobs. In 2016, the economy reportedly generated over 856,000 new jobs. Against the Kenyatta regime’s pledge of a million jobs a year, this figure sounds like quite an achievement to shout about from the rooftops – until you examine the details. More than 700,000 of those “new jobs” were in the informal sector, the survey says. That means over 90 per cent of the “jobs” were not jobs at all. Only about 85,000 were real new jobs. Wage employment stands at about 2.5 million out of the country’s population of about 50 million.

What the government statistician calls “new jobs” comprise, at best, fitful micro-enterprises scattered across the country and, at worst, all those desperate survival initiatives impoverished Kenyans venture into to get by: running mobile phone credit stalls, being hired as a motorcycle taxi rider, hawking, distributing leaflets on the streets at a fee, burning charcoal, roadside maize roasting, vending ripe bananas and porridge at construction sites, keeping a corner vegetable stall, piecework at sweatshops, etc.

As a matter of fact, there have been numerous reports of closure of businesses and staff layoffs in Kenya over the past year. In the week the economic survey was released, the region’s biggest bank KCB announced a plan to layoff an unknown number of workers. At least six other banks have done the same.

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By Henry Makori

Indigenous Women: The Frontline Protectors of the Environment

Indigenous women, while experiencing the first and worst effects of climate change globally, are often in the frontline in struggles to protect the environment. A forum organized by the Women’s Earth and Climate Action Network (WECAN) brought together indigenous women from around the world to discuss the effects of climate change in their communities and their work towards sustainable solutions.

“This forum is very much dedicated to frontline communities around climate change issues…we really wanted to take the time to visibilise women’s leadership and their calls for action,” said WECAN’s Executive Director Osprey Orielle Lake.

She added that indigenous women are “drawing a red line to protect and defend mother earth, all species, and the very web of life itself.”

Among the forum’s participants was Executive Director of the Indigenous Information Network Lucy Mulenkei who works with indigenous communities in Kenya on sustainable Development.

She told told IPS how Kenyan indigenous women are bearing the brunt of climate change, stating: “We have been experiencing a lot of prolonged droughts…so it leaves women with added workload [because] getting water is a problem, you have to go father.”

In February, the Kenyan Government declared a national drought emergency which has doubled the number of food-insecure people, increased the rate of malnutrition to emergency levels, and left millions without access to safe water.

Because of climate change, the country also experiences heavy rains which lead to floods, impacting indigenous communities as a whole, Mulenkei said.

Such extreme weather is largely attributed to the fossil fuel industry whose greenhouse gas emissions are contributing to global warming. The United States is responsible for almost 20 percent of the world’s greenhouse gas emissions, making it one of the top emitters.

Despite being over 8,000 miles away from Kenya, Mulenkei told IPS that “whatever you do from far away impacts us here.”

The fossil fuel industry is also impacting indigenous communities within the U.S. through its mega infrastructure projects.

“You cannot imagine how much things changed when the oil came,” Kandi Mossett, Indigenous Environmental Network’s (IEN) Extreme Energy and Just Transition Campaign Organiser, said in reference to the discovery of oil in the Bakken Shale formation in North Dakota.

“The air is being poisoned, the water is being destroyed,” she continued.

Mossett is among the frontline indigenous women in the movement against the Dakota Access Pipeline (DAPL) which garnered international attention in 2016 after thousands of protestors were met with violence by security forces.

She told IPS that indigenous communities are disproportionately targeted for such projects. “You don’t see a frack well in Hollywood or in the White House lawn. You see it in low-income, minority populations.”

Picture credit: Women from the remote Turkana tribe in Northern Kenya carry water from a well. Christopher Furlong/Getty Images.

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By Tharanga Yakupitiyage

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