Politics

TV Interview: Value Addition in Africa

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I was part of a panel on Talk Africa of CGTN, discussing how Africa can build manufacturing capacity and scale value addition.

 

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The Changing Face of China-Africa Relations

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This article first appeared in the China Daily on May 11, 2018

The relationship between China and Africa is one that generates immense interest and debate in both countries and around the world. The combination of strengthening economic growth in both China and Africa, particularly in the context of an increasingly insular USA and Europe means that the relationship between the two parties will play a progressively important role in their development and global dynamics. There are three factors to consider as we unpack Sino-African relations.

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(source: http://africanleadership.co.uk/china-open-to-president-weahs-view-on-china-liberia-relations/)

First is the leadership of China where Xi Jinping is redefining China’s presence on the global stage. In the context of the trade spat between the USA and China, Xi Jinping continues to emphasise China’s commitment to globalisation and free trade perhaps best demonstrated in his massive Belt and Road Initiative. In early April, Jinping restated his commitment to continue to open the nation’s economy affirming that China will open its doors wider to foreign investment. While some may argue that China does not walk the talk and that the country’s economy remains very protected in some ways, what is clear is that Xi Jinping is positioning himself as a global leader and one who encourages global cooperation both economically and diplomatically. Whereas in the past it seemed China was happy being a leading economy but not necessarily a leading voice in global interactions, Jinping is redefining how China positions itself globally. As Europe and the USA turn inward, he emphasises that China continues to look outwards and seeks to lead global conversations.

The implications for Africa in this regard is that Africa can expect initiatives under Jinping to deliberately foster deeper collaboration and cooperation. These will not only be from an economic standpoint but politically and militarily as well. Geopolitical dynamics in Africa will be informed by a leadership in China that seeks to strengthen its global presence and reputation and Africa will be an important party in how this plays out globally.

Secondly and linked to the point above, Jinping is actively rebranding China. Brand China has both positive and negative elements. The key negative elements particularly with regards to Brand China in Africa, is that China is corrupt and environmentally destructive. It seems China is aware of these negative elements of its brand because the Two Sessions addressed both these issues. A key focus of Two Sessions was to ratify a law to set up a new powerful anti-corruption agency. Africa’s struggle with corruption is a well-known fact, and Brand China has been seen to tolerate or even facilitate this corruption. Thus, the announcement of steps that will be taken to stem corruption in the Chinese government may have an impact on Africa in the form of new rules and requirements linked to Chinese funding. The two Sessions also revealed the growing importance of environmental concerns as a government priority in China.  This seems to stem not only from an understanding in the Chinese government that environmental degradation must be addressed as a strategic concern for the country and economy, but also as a response to growing demands from the Chinese public for responsible environmental behaviour and action as part of the country’s development model going forward. Again, it will be interesting to see if this shift will be reflected in how the Chinese government interacts with Africa going forward. The point is that Jinping’s administration is taking clear and bold steps to address the negative aspects of the country’s brand as he seeks to position China as a powerful and responsible global leader.

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(source: https://www.irishtimes.com/business/economy/chinese-trade-unexpectedly-speeds-up-but-is-expected-to-drop-1.3112037)

Finally, as China continues to strengthen economically, and as Jinping strengthens China’s global influence, we will likely see a heightening of Sinophobic narratives on China’s presence in Africa by Europe and North America in particular. One key feature of EuroAmerican analysis of China in Africa has been notable Sinophobia; and we have seen an evolution in this Sinophobic commentary. The narrative started with Europe and North America warning Africa that China is the new colonial power and that China will subjugate Africa with colonial-like behaviour that undermines Africa’s sovereignty. This then shifted to the Africa being warned that China only wants to exploit the continent’s natural resources in a rapacious relationship that will suck Africa dry. This was coupled with accusations that China facilitates and participates in corruption in Africa and that Chinese investment has poor social and environmental standards and indeed kills the continent’s environment in the form of unregulated pollution and destruction of wildlife. Now, the narrative is that China is saddling Africa with unsustainable debt and seeks to use indebtedness to further its geopolitical control over the continent. China should expect more aggressive Sinophobic commentaries coming out of Europe and North America as an ideological battle is waged on African hearts and minds.

However, despite the fact that the Sinophobic narrative will continue to be generated by Europe and North America, the reality is that China is not good at communications. China does not do a good job at sharing its contributions to Africa’s development in a strategic and sustained manner both inside and outside Africa. Whereas Europe and North America have sophisticated communications strategies both as government and private sector, the same cannot be said of China. Both the Chinese government and private sector ought to be cognisant of these dynamics and generate positive counter-narratives on China’s presence in Africa. Africans ought to also be aware of the ideological battle on the continent and generate informed narratives that analyse China-Africa relations from an African perspective.

Anzetse Were is a development economist; anzetsew@gmail.com

 

Podcast: Why Africa needs to pay a lot more attention to politics in China

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I talked with Eric Olander and Cobus Van Staden of the China Africa Project Podcast and discussed why Africans need to pay more attention to what happens at events like the “Two Sessions” gatherings given China’s large and growing importance in African trade and development. This drew on an earlier column I wrote on Africa and China.

TV Interview: Is President Kenyatta’s ‘Big Four’ supported by the proposed Budget?

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On February 11, 2018, I was part of a panel discussing President Kenyatta’s ‘Big Four’ Priority Agenda

Counties starting to realise their power to drive projects

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This article first appeared in my weekly column with the Business Daily on January 28, 2017

Over the last week I have been  traveling around the country and interacting with county governments  on various assignments. What has become clear is that county governments are beginning to truly appreciate the power they have to guide the direction of development in their counties. Devolution is reorganising power dynamics at county level in several ways.

The first is that devolution seems to be engendering brain gain to counties. Professionals from private sector and development agencies are now working as technical staff in counties. This is due to both push and pull factors. On one hand, county governments are seeing the wealth of expertise in their county and pulling individuals to lead various dockets in the county governments. Secondly, as professionals interact with county governments, they begin to get excited about how they could contribute to the development of the regions in which they work and push themselves into county structures. This confluence of factors is creating a situation where county need for expertise meets the willingness of professionals to work in the county, to the benefit of the county.

Council of Governors meeting. FILE PHOTO | NMG

(source: https://www.businessdailyafrica.com/image/view/-/4281906/medRes/1870589/-/maxw/960/-/usgtixz/-/GOV.jpg)

Secondly, counties have learnt from the first phase of devolution and county structures are strengthening which has implications for numerous players. The first is that stronger structures at county level means development partners must align their funding and programs with County Integrated Development Plans (CIDP). No longer are donors coming in with thematic areas and priorities with which counties must comply; it is now the other way around.  Secondly, counties are becoming increasingly aware of the power of private sector in their counties and are taking steps to make the private sector environment positive and enabling. There is a willingness in many county governments to engage with the private sector on what county governments can do to build private sector activity in their jurisdictions with a focus on job creation and income growth.

To be clear these dynamics are not unfolding evenly across counties, but this is the general direction of the momentum being generated at county level. For example, counties are not interested in coordinating numerous donor programs each with varied objectives not linked to the CIDP; that is where the momentum sits. It is clear that in this second phase of devolution, that donors and development partners have to not only align their programs with the CIDP, they must ensure that  County Governments are aware of their activities. There is a sense of autonomy emerging. Donors aren’t the all powerful entities they used to be; either they make themselves relevant or counties will eventually have no real use for them.

http://jamhurimagazine.com/thumbnail.php?file=47_Kenya_Counties_217764471.jpg&size=article_large

(source: jamhurimagazine.com/thumbnail.php?file=47_Kenya_Counties_217764471.jpg&size=article_large)

In terms of private sector, what is clear is that there is growing interest for county governments to engage with private sector. As counties open channels for communication with the private sector, there is impetus  for private sector to effectively organise itself at county level to fully leverage the attention of county government. Private sector associations must now ensure they have representation in all counties, so that they are prepared to present their ideas on how to work more effectively at county level. Gone are the days where private sector associations had a main office in Nairobi and paltry representation at county level. Private sector must be organised and effective at both national and county levels if they are to bring strategies, relevant to the local context, to the table.

Anzetse Were is a development economist; anzetsew@gmail.com

Shared economic values can heal the political divide in Kenya

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This article first appeared in my weekly column with the Business Daily on January 21, 2018

Last year’s election highlighted the deep and bitter political divide among Kenyans, divisions usually rooted in tribal identity politics. However, if one were to ask Kenyans what they want for the country, one would likely find similar answers across the political divide. We want good schools and hospitals, decent jobs, respectable roads, security, shelter, an end to corruption and freedom from hunger and poverty. And since Kenyan politics is renowned for not being rooted in ideology, it is possible that individuals from opposite sides of the political divide could have similar views on how the government can better provide services and stimulate economic development. It is only in Kenya that two people may have identical ideologies of how they want the country to run, but then vote for different candidates due to tribal identity.Image result for 47 tribes of Kenya

(source: https://hornaffairs.com/wp-content/uploads/2016/07/Image-Kenya-ethnic-distribution-map.gif)

This conundrum is one that can be tapped into in order to unite Kenyans. The fact that Kenyans share concerns across political divides ought to be leveraged to bring the country together. Rather than focusing on the politics of identity, Kenyans ought to focus on the politics of issues such that both the ruling party and opposition engage Kenyans on how they will or would improve the socio-economic status of Kenyans. Kenyans could unite and, as a people, make the same demands regardless of which political party is in power.

Further,  the fact that Kenyans may well share ideologies on socio-economic development could be used to tackle another monster in the closet—the class divide. Just under half of Kenyans live at or below the poverty line, and the bulk of the rest live day to day or pay cheque to pay cheque. This means that there are those on opposite ends of the political divide who have similar incomes, standards of living and daily struggles. Those who would likely relate more to fellow Kenyans who face similar issues but are of a different political leaning than those of another class but with whom they are aligned tribally. It is important that Kenyans unite around addressing the class divide in Kenya rather than letting politicians use the class divide as a tribal motivator as to why Kenyans should vote for them.

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(source: http://www.msafirimag.com/wp-content/uploads/Hand.png)

Finally, Kenya can use economics to unite the country; the economics that builds incomes, creates jobs and delivers high quality government services. Kenyans ought to find those with whom they share ideologies on economic development and create fora that discuss shared concerns, no matter one’s political affiliation. In using economic development as a starting point, Kenyans will find that they have more in common with their sworn political enemies than perhaps they thought.

Anzetse Were is a development economist; anzetsew@gmail.com

Factors that will inform the cost of living in 2018

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This article first appeared in my weekly column with the Business Daily on January 14, 2017

This year started with the news that price for maize flour has increased from KES 90 to KES 115 after the stock Government subsidised flour ran out. Understandably, Kenyans are complaining with many asking how they are going to manage rising costs of living, particularly in urban areas.

There are several factors informing the increase in the cost of living the first of which is that the country has not fully recovered from the 2017 drought. The short rains have not been as robust as hoped and thus food production is till sub-par. As a result, until the country fully recovers, Kenyans can expect to continue to face upward pressure on food prices.

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(source: https://www.foodbusinessafrica.com/wp-content/uploads/2017/09/MaizeonShelfKenya.jpg)

Linked to the point above is continued aggressive inflation. During the last four months of 2017, average inflation was between 7.98 and 8.4 percent- well above the preferred government ceiling of 7.5 percent. Thus inflation will mean money does not stretch as far as it used to, and thus Kenyans will find basic items eating into their household budgets significantly.

Third is the reality that 2017 was a tough year for the economy due to several factors, the first of which was a struggling agriculture and financial sector. Agriculture which is about 30 percent of the economy was hit by the drought and the financial sector, which is about 10 percent of the economy, was hit by the effects of the interest rate cap. Finally, the prolonged election period affected the economy and GDP growth was revised downward from 5.9 percent to an actual growth of 4.4 percent in Q3 of 2017. Elections have tended to have a negative effect on economic growth and 2017 was not an exception. Suspended investment decisions and disrupted business activity led to the reality that Kenyans did not make as much money as they would have had it not been an election year. As a result, Kenyans are feeling the pinch of muted economic growth as having less money in their hands leaving them feeling more broke than usual.

https://www.bizmalawi.com/sites/default/files/images/news/inflation1.jpg

(source: https://www.bizmalawi.com/sites/default/files/images/news/inflation1.jpg)

Fourthly, as I have stated before, the interest rate cap led to a contraction in credit growth as banks became more hesitant to extend credit in the context of capped loan pricing. Sadly, credit growth may be further stymied by the onset of the new International Reporting Financial Standard 9 (IFRS 9) where banks are required to switch from an incurred to an expected loss model. Without getting into much detail, IFRS will mean that, at least in the short term, banks will be more risk averse as they reduce lending periods to high-risk borrowers to limit the probability of default. Thus Kenyans may find that it will be even harder to get access to credit due to both the cap and adoption of IFRS. This will lead to less money in the hands Kenyans which will make them to more acutely feel the cost of living.

Finally, the cost of oil is set to rise in 2018, which is not good news for Kenya which imports oils products. Increases in oil prices will likely drive inflation upward exacerbating the already high inflation status the country is in at the moment.

In short, Kenyans should brace for a high cost of living in the short term. It is hoped that a return to stability will allow the economic engine to get back to normal and create channels through which Kenyans can earn an income to adequately meet their cost of living.

Anzetse Were is a development economist; anzetsew@gmail.com