Agroeconomy

By Michael Meyer It’s the end of the rainy season in Kenya, and this year’s storms have been almost biblical, washing away not only people’s sunny disposition, but also their bridges, buses, livestock, and crops. But the damage cannot be blamed on the weather alone. Roads have been hit especially hard; potholes the size of cars litter highways in the capital. Near the offices of the United Nations on Limuru Road, for example, traffic backs up for a half-mile as vehicles nudge into oncoming traffic to avoid one particularly large water-filled hole. Elsewhere, vehicles creep along slowly, bouncing from crater to crater, while the carless get tossed around in matatu minibuses as they travel to and from work. You might ask why the government doesn’t do something. After all, potholes are a basic and highly visible indicator of a country’s social and economic wellbeing. Good roads are an indicator of government effectiveness, while bad ones suggest incompetence. Any government seeking to retain the support of voters typically goes out of its way to make roads passable. Why not in Kenya? The reason is brute economics: the government cannot afford it. Consider the state of the Kenyan budget. Today, roughly half of all revenue goes to fund the inflated salaries and perks of government officials, including parliamentarians, governors, local and national bureaucrats, and endless legions of administrators. Another 40% goes to repaying interest on the country’s burgeoning international debt, which now exceeds half of Kenya’s annual GNP – a red flag for credit ratings agencies. Add to this the mysterious propensity for about a third of the national budget simply to disappear each year, presumably into the pockets of venal politicians, and Kenya has the makings of a serious economic crisis that is fast coming to a head. The good news is that Kenya’s weather-related chaos has coincided with renewed efforts to address administrative and budgetary roadblocks. For starters, President Uhuru Kenyatta recently announced a major anti-corruption drive that, unlike past efforts, is already producing results. Several senior government officials have been investigated and charged; some are already on trial, while others have lost their jobs and have been placed under house arrest. These are all firsts, and the reason is obvious: curbing theft by government cronies is among the fastest and most effective ways to raise revenues. Of course, ending graft is also a good way to reassure lenders, and the timing of Kenya’s housecleaning is no accident. In September, officials from the International Monetary Fund will return to Nairobi to review Kenya’s financial performance – specifically, its eligibility for a $1.5 billion standby credit facility. Kenyan officials are clearly worried, as the IMF has already put Kenya on its debt watch list and will almost certainly demand further belt-tightening. At the very moment that Kenya needs to borrow more to bridge a yawning budget gap, its leaders are bumping up against the cold calculus of international finance. If we widen the lens further, Kenya, like the rest of Africa, is approaching a demographic tipping point that must also be addressed. According to Salih Booker and Ari Rickman of the US-based Center for International Policy, by 2035 Africa will have more young people in the job market than the rest of the world combined, and by 2050, one in every four humans will be African. If sufficient employment opportunities are created for this youth wave, the benefits to African economies will be profound. But if future generations are unable to find productive outlets for their skills, the social fallout could be severe. Kenya’s leaders understand this, which is why the government has made manufacturing, health care, education, and affordable housing top priorities in its Vision 2030 development program. But, as laudable as these targets are, the authorities’ ambitions are hard to reconcile with the realities of a Nairobi street during rainy season. Lurching along a rutted track that doubles as a major urban avenue, Kenyans are all too aware that a pothole is not simply a pothole; it is a window into the deeper crises that Kenya, like much of Africa, has put off repairing for far too long. Michael Meyer, a former Newsweek editor, is Dean of the Graduate School of Media and Communications at Aga Khan University in Nairobi. This post was first published by Project Syndicate. Read original article.

Agroeconomy

Kenya’s Perfect Storm