Unit 3.2:
How are Public Resources Managed?

 
Handout

An autocrat and his money: A morality play in five acts
This daily life, family-based allegory highlights by analogy the importance of managing public sources for the public good and the bad things that can happen when they are mismanaged. It also about the eternal truth that everything must be paid for. Read the story and think about the parallels with management of public resources

Act 1. The authoritarian father


The father of a large family has a good job, a decent salary, loving children and a spouse always eager to please him. As time goes by, he begins to imagine that their love and respect are his due because he is a very wise man who can do no wrong. He rarely asks his family’s opinion on family issues and doesn’t listen to their answers when he does ask; unsolicited advice sends him into a rage. To suit his newfound sense of self-importance, he begins wearing expensive clothes and frequenting posh clubs where he makes new friends whose hospitality he returns by standing rounds of French brandy. He is too busy to bother with his children’s demands for new school uniforms and only frowns when his wife complains that the housekeeping money is buying less and less, what with rising prices and the children growing up and developing ravenous appetites.

Since these days he mostly dines at the club on steak or chicken tikka, he fails to notice that the protein content of his family’s diet is slowly declining; nor does he register that their greetings are becoming more dutiful than loving. Finally, he feels, he is beginning to move in the right circles; life can only get better…

 

Act 2. The fully financed man


Soon enough, the father of the family described above begins to realise that he really needs a new car, preferably a late-model Mercedes, to keep up appearances. Being accepted in the right circles, he reasons, is the only way to get ahead, so he owes it not only to himself but also to his family’s future prosperity to do the smart thing now. What is more, his friends at the club have been talking about an exciting new investment opportunity that they have heard of through their excellent contacts in government and industry; they say the returns will be astronomical and practically guaranteed. It would be a shame to miss out on such a golden chance, they tell him, and one of them even discreetly offers to lend him the necessary money (‘Just between friends; pay it back when you like.’) Offended, he declines. At night, he can’t sleep, thinking of how he could turn his and his family’s lives around if only… but there are school fees to pay and the household bills to meet and he just doesn’t have the money… But wait a minute, there is a way out! And off he goes the next day to see his bank manager, who grudgingly agrees to a substantial loan at a rather steep rate of interest. He leaves the bank with a spring in his step and gives himself the rest of the day off, going straight to his club for a boozy lunch, during which he contemplates a rosy future. He can now not only buy the car as well as get himself a cut of his friends’ new venture – he knows the return on the investment will give him a handsome income even after paying the bank its pound of flesh. Very soon, perhaps within the year, his life will be transformed. He begins thinking of foreign holidays as the level in his bottle of brandy falls….

Act 3. The reckoning


Alas, as the months pass, the returns on his new investment begin to dwindle; these are just temporary difficulties, his friends assure him, a little cashflow hump occasioned by rapid expansion. He exudes a similar confidence when talking to his bank manager, who doesn’t look entirely happy but cannot resist his sweeping optimism. And the returns do begin to pick up, until one day the morning newspaper delivers such a shocking blow that he cannot, for a full minute, even breathe. The shadowy holding company he invested in has gone into receivership and its directors are rumoured to have left the country just a step ahead of the police. Surely, there has been some dreadful mistake, he thinks, recovering a little, and going off to work, where the day passes in a daze. In the evening, he hurries to the club to seek the advice and solace of his friends. The doorman gives him a strange look as he goes in, to find only a couple of strangers at the bar. The barman, giving him a replica of the doorman’s look, says no, X hasn’t been in the whole week, and as for Y, he believes he’s vacationing in the Seychelles. Perhaps Z and a few of the others might drop in later. A few drinks later, just as he begins to realise that perhaps his ‘friends’ are actually avoiding him, the barman slides a leather folder onto the bar in front of him and hovers, obviously waiting for him to open it. Inside is a thick sheaf of bar bills he has been signing (with a flourish, needless to say) going back six months. The total, for the second time that day, takes his breath away….

The next morning, swallowing his pride, he throws himself at the mercy of the bank manager. After several hours of tense negotiation, he walks out a smaller man, seeming to have shrunk inside his clothes. The bank will help him out, yes, but his two elder sons will have to leave university; his daughter, who’s just finishing school, can forget about college too. The rest of his brood will have to transfer from their expensive private school to a much more modest ‘community-subsidised’ one. No more visits to the dentist and no more physiotherapy for his wife’s incipient arthritis; her old mother will have to leave the comfortable nursing home and move in with them. But, miraculously, he can retain the car, as the payments are finished – even though the bank manager is advising him to sell it and buy a modest Korean town car. And his bar bill has been cleared and his club membership is paid up till the end of the year. Even though his wife won’t speak to him any more and his older sons scowl when they see him, at work the askaris still salute and call him mdosi, and his subordinate staff eye him with envy. He tells himself, ‘You’re not beaten yet…’

 

 Act 4. The foreign investor


 Sure enough, this is not the end of the story for our paterfamilias. As he lurches on from day to day, getting up in the morning, putting on his good suit and going to work in his fine car, trying not to see just how quickly his family’s situation is deteriorating, his rural property, which he thought worthless, has caught the attention of a keen-eyed man of the world. One day, he is visited by a stranger, a foreigner dressed in such an exquisite suit that he suddenly feels shabby and awkward despite his own 100,000 shilling suit. But far from being condescending, the man greets him warmly and with great respect. He praises the rural property, the superb view, the pleasant climate, the small lake and above all, the fine soil, which he announces is perfect for growing a giant purple flower called forexia volupta that is apparently in great demand in Europe at the moment.

Becoming brisk and businesslike, he announces that he has a mutually profitable proposition – he uses words like ‘win-win’ and ‘synergies’ and ‘proven efficiencies’ and so on. He will bring in the capital to develop our father’s property into an export-processing, modern agribusiness facility; the father of the family will receive a share of the profits, his idle children will have jobs, but, ‘This is not a picnic, it is serious business. Everyone will have to stay focused, make sacrifices, you understand, before we break through into profitability.’ Within weeks, the greenhouses go up, tractors begin ploughing up the place, an elaborate pumping station begins drawing water from the lake, and prefab workers’ quarters go up in one corner of the lake. Our father’s older children are taken off to work, grumbling and moaning, by one of the fleet of gaily painted lorries that the investor has acquired. They are joined in the workers’ quarters by a small army of cousins, aunts and uncles, all grateful for jobs, all praising their wise, generous father.

 

Act 5. The wasteland


The foreign investor did tell our father that the export venture was no picnic, so when he receives letters from his kids complaining of long hours, restricted toilet breaks and mysterious rashes they claim are due to handling dangerous chemicals, he thinks to himself, ‘Lazy youngsters, they need hard work to toughen them up, they must realise life is a tough game.’ The thought of all the jobs he has provided still fills him with a warm glow; he has heard that, in his home village, he is now spoken of as a reincarnation of the great chiefs of the old days. He is now back on the club circuit, where his old friends have reappeared, greeting him effusively and talking of more solid inside deals, as if nothing had happened. He is drinking heavily now, so even the news that two of his daughters are pregnant barely seems to register; he goes home and shouts at his wife, and in the morning can barely remember that something serious has happened.

Not long after, he receives an agitated phone call from his uncle, the farm manager. He drives upcountry to confront an appalling sight: his once-beautiful rural property is now a wasteland, the trees cut down, the lake is just a slushy expanse of mud, and the ripped up soil, carpeted with dead, evil-smelling flowers, has, even to his urban eyes, a poisoned look to it. There is no sign of greenhouses, pump or lorries – just the workers’ quarters, by now little better than a slum. A ragged, angry crowd emerges from this slum and starts shouting at him; a stone is thrown, and the windscreen of his Mercedes shatters. He jumps in and drives off as another stone bounces off the roof. Was that his own son he glimpsed in the side mirror, his arm drawn back to fling yet another?

Back in town, he finds a letter awaiting him, containing a small cheque ‘in full and final payment’ from the investor, who thanks him for a ‘fruitful’ partnership and announces that, the fashion for forexia having ended, he is off Sudan, where ‘exciting new opportunities’ are opening up. He is staring blindly at the letter when the phone rings. It is his eldest son, ‘Dad, look, sorry about the riot, we’ve been talking it over, and we think we can still make a go of this family with hard work and patience. Only, you see, this time, you’ll have to talk to us…’

 

Some questions:

 

 


Background Information

In the context of state affairs, good governance involves the proper management of public resources. It is about allocating and using those resources in ways that help society to satisfy its needs and to achieve its goals.   

 

Where does the money come from?

Taxes, loans and grants in aid are some of the most important sources of government income or revenue. And the stronger the country’s industrial and commercial enterprises, the more the government can raise in various taxes.

The most common taxes are:

 

All the above taxes fall under the control of the Kenya Revenue Authority (KRA).

In addition, donors – especially the development agencies of industrialised countries – provide grants in aid to the government in support of its public development programmes. Together, the taxes and grants in aid make up the main sources of finance for the government in carrying out its responsibilities – making policy, framing legislation, maintaining law and order, and providing basic services.   

 

What happens when public resources are mismanaged?   
 
The government is the keeper of public resources – which, along with the revenues mentioned above, include natural resources such as forests, oil and mineral resources. It is the task of the government to care for and conserve them. The overriding aim should be to utilise the country’s resources in such a way that its people can achieve a fair and decent standard of living. So, in using resources, the government shares with the citizens the responsibility for good planning and efficient management. And only if public resources are managed efficiently and equitably can there be broad-based national development.

But when public resources are not properly managed, the way is open for waste, for corruption, and for unequal treatment. These kinds of mismanagement are more likely to occur in authoritarian regimes that are characterised by a lack of transparency and an avoidance of accountability. They can be seen as a failure of leadership – whether at national or local levels.

One consequence of such mismanagement is that the public loses confidence in the democratic system. People see that corruption feeds on itself. If someone bribes in order to win a position, he may well have to continue bribing in order to stay in that position. So the cycle is completed – leaders misuse resources in order to maintain their leadership positions, in order to enrich themselves and also to maintain the support of others. What are forgotten – however much the leaders mouth them – are the democratic principles of equality and justice.

People see that the country’s development patterns are distorted. Some areas receive more development assistance than others – and allocations are based more on allegiances than on needs. The neglected areas become more marginalised; their peoples become more alienated.

 

Who accounts for public resources?        

The government has a duty not only to efficiently manage public resources but also to report back to the public. There are a number of institutions that are involved in checking on the government’s performance. They are the ‘watchdogs’ – and they therefore have an important contribution to make in the maintenance of good governance.

Office of the Controller and Auditor General
It is the responsibility of the Office of the Controller and Auditor General to check whether government money has been used as planned. It also checks whether the right procedures have been used when money is spent. The Controller and Auditor General submit reports to Parliament for debate and for action – though the appropriate action does not always follow the debate. On the basis of the reports, Parliament is supposed to make recommendations to the Executive.

Ministry of Finance
It is the responsibility of the Ministry of Finance to make decisions on government income and expenditure. The Ministry or Treasury organises all government incomes and revenues. The collection of taxes and the preparation of the national budget are the two key responsibilities of the Ministry of Finance. The kinds of tax, as listed above, include PAYE, VAT, import duties, fuel levies and various licences.

The National Budget: Living within our means?
In the same way as a sensible householder plans his expenditure according to his income, the government draws up, every year, a detailed plan of how it will raise and spend funds. The difference in the government’s case is that it can plan to increase its income much more freely than the individual householder – by increasing existing taxes and licence fees, introducing new taxes and licence fees, or borrowing from the domestic market (through Treasury-bills and bonds) or the external market (from the World Bank, other lending bodies and donor countries). But this extra income is not free – if taxes on a particular product or service are set too high, demand for that product can drop steeply, hurting not only producers and consumers but also actually reducing total tax revenues. Similarly, money borrowed domestically or externally must eventually be paid back – with interest; so it should be spent productively; that is, in such a way that it earns the government enough money (through direct sales or increased tax collections) to at least repay the principal and interest. So, the proposals for taxation and expenditure contained in the national budget must be both realistic and ‘prudent.’

The next year’s budget is prepared at the end of every financial year (June) and presented to Parliament for debate. It is only after it has been agreed to by Parliament – in other words, Parliament has decided that it is realistic and prudent – that the Government can use money raised through taxes to run its various projects and activities. This is one way in which Parliament controls the executive arm of government. It is part of the system of checks and balances that is supposed to keep the government free from corrupt practices.

The Central Bank of Kenya: The Government’s Banker
The Central Bank of Kenya was set up by the Constitution. It is the main banker of the government and is responsible for issuing Treasury-bills and bonds and interest rates charged or paid by commercial banks on money borrowed or deposited. The Bank no longer sets interest rates as it used to do in the past but attempts to influence them to stay within reasonable limits by its own operations on the market. These primarily involve its own borrowing from the domestic market using short-term Treasury-bills and long-term Treasury-bonds – a Treasury-bill being basically a piece of paper that constitutes a government promise to repay the bearer on a specified date the sum mentioned on it plus the interest at which it was sold. ‘T-bill’ rates are taken as ‘indicative rates’ by commercial banks – they know that if the interest they pay on deposits is too low, depositors will prefer to lend to the government; similarly, when T-bill rates are high, commercial banks tend to lend more to the government (i.e., to buy more T-bills) than to private companies and individuals, ‘starving’ the private sector of credit. Since ‘T-bill’ rates go up when the government borrows more, it can by curbing its appetite for borrowing also contribute to the health of the financial markets by ensuring that interest rates do not put credit out of the reach of individuals and businesses that need it for working capital or new business investment. The Central Bank of Kenya is also supposed to protect the interests of citizens by supervising and regulating the activities of all financial institutions and commercial banks, preventing mismanaging of depositors’ funds, shutting down or nursing back to health insolvent financial institutions in such a manner as to protect depositors’ and creditors’ interests.
 
Creating wealth: How can public resources be increased?

Public investment policy
The Government has, in the recent past, been trying to improve the climate for investment and to increase economic production and productivity. This has meant, among other things, less government control over economic activity and less government intervention in the economy.
Less government intervention in the economy means the market and private sector begin to determine the direction and amount of investment and economic activities. Liberalisation of licences, rules and procedures is being used to attract both foreign and local investors who it is hoped will boost economic growth and development. It is also hoped that with greater freedom, more citizens, no matter their gender, ethnicity or disability, will have more opportunities to investment.

Foreign investment
As a result of the relaxing of import controls by the government, increasing numbers of goods made outside Kenya are entering the country and competing with locally produced goods. A number of foreign investors have also invested in the country. Supporters of these policies say competition is good for the economy because it increases the production of better quality, more competitive goods and services locally. Critics say the flood of imports is drowning local industries, particularly textiles, and that foreign investors, especially those enticed by the tax incentives and ‘reformed’ labour laws to set up manufacturing businesses in the Export Processing Zones (EPZs) not only exploit labour but are also prone to ‘flying away’ as soon as better opportunities open up elsewhere. One example is the textile manufacturers who set up shop in Kenyan and Ugandan EPZs to take advantage of the quotas for African textile imports under the US Africa Growth and Opportunity Act (Agoa); now that a special exemption (allowing exports from Kenya to be made of cotton imported from other countries) is coming to an end, many are closing down and moving to other countries. Another example is in horticulture, where tougher European Union sanitary rules are seeing investors deserting Kenya’s till-now booming sector for Eritrea and Ethiopia.
The Government of Kenya has consistently encouraged foreign investment as a means of increasing economic growth and development. In the Sessional Paper No 10 of 1965 on Socialism and Its Application to Planning in Kenya, for example, the Government made it clear that it would promote foreign investment. Because of this, it has refused to nationalise or take over foreign-owned companies.
In 1976, the Government passed an Act of Parliament to protect foreign investment. This allowed foreign investors to send out profits made in Kenya to their mother company abroad.
Again, critics say foreign investment has disadvantaged local investors for a number of reasons. Foreign companies often have:

This results in unfair competition between foreign and local investors. Also, it is important to have investment policies that offer job opportunities to disadvantaged people or people with disabilities. These include the physically disabled and those with hearing loss and speech problems. At present, the Government’s investment policies do not provide for people with different capabilities

The worsening security situation in the country is a major obstacle to the effort to encourage investment, whether local or foreign. Investors obviously want a secure business environment in which they can make a profit. It is the responsibility of the Government to create such an environment. Another problem is corruption. This drives away investors because corruption increases the investor’s risks. The Government has its work cut out to improve security and eliminate corruption.
 

Management and utilisation of natural and public resources
Land, water, forests, minerals and wildlife are among the most important natural resources of any country – without them, human beings literally cannot exist, as even forests and wildlife are critical to ecology and productivity. The most fundamental issues of natural resources are: Who owns them? and How are they used? In other words: For whose benefit they are used? and Are they being used sustainably or not? Unwise, unsustainable use has made many countries around the world waste their natural resources, rendering land infertile by over-cropping and poisoning it with pesticides, cutting down forests faster than they are replanted, polluting their water reservoirs and rivers, killing off wildlife in large numbers. Already, Kenya has lost most of its forest cover, threatening its water resources and leading to human-wildlife conflict (caused by expansion of human settlement which is itself partly caused by inequitable distribution of arable land). Wise use of natural resources for the benefit of all citizens is thus a key governance issue.

 

Land

The one resource which is most sensitive in a country like Kenya is land. For purposes of managing land, Kenya has divided its land as follows:

 
GovernmentLand Act
The Government Land Act cap 280 of the laws of Kenya, governs all the different categories of land. The Act, which came into force in 1915, gives the President powers to manage Government land, including the allocation of such land. This is provided for in Section 3 of the Act. The President in turn has empowered the Commissioner of Lands through Section 5 of the Government Land Act to manage Government land, including agricultural land. The procedures for allocation of land are provided in Sections 9, 13, 15, 19, 20, 21, and 27 of the Government Land Act. These Sections also explain how leasing of land is to be carried out.

The TrustLand Act
The Trust Land Act cap 288 of the laws of Kenya, governs the management of Trust Land. The Act came into effect on 1 March 1939. Trust Land is land held in trust by a County Council within whose area the land lies. The County Council holds the trust land for the benefit of the residents of the area in which it is situated. The land may be allocated for:

 

All such allocations must be done within the existing relevant laws.
 
Ownership of land by women
Traditionally, women did not own land in most Kenyan communities. Though the land was communally owned, it was men who controlled it. Women were, however, allowed to use land for the cultivation of food crops. Women were therefore for a long time disadvantaged in the modern economy, as they could not use land as security to obtain a loan from a bank or any other financial institution, as most banks needed a land title deed as security for loans.
Today, however, women are allowed to own land and many hold title deeds. In practice, it is mainly educated women who have taken advantage of this. Many rural women do not dare, or are financially unable, to break the taboo that land belongs to men only. Many of them still cannot get a loan using a land title deed. The law, however, does not stop any woman, rural or urban, from owning land.

Freehold land
Freehold land means that the owner of the land has full ownership of the land, without any conditions attached to it. Such land was formerly held under customary law. Now the owner has a title to the land.

Leasehold land
Leasehold refers to land which individuals or companies have the right to use or live on only for a certain period.  The Government or County Council gives the individual this right. In leasehold, there are conditions attached to the land. These conditions usually specify the purpose for which the land may be used and the period during which the leaseholder or ‘owner’ may use the land.

Private ownership of land
Private ownership of land by individuals and especially Africans was accelerated by the introduction of the Swynnerton Plan of 1954, which also resulted in the drawing up of boundaries around an individual’s holding and the issuing of title deeds.
Titles allow land to become the property of the person to whom the title is issued. This means that no one can take away the land from whoever holds the title. The title stands as a certification of ownership of the land in case of dispute.
The law, however, allows the government to take back such land, should there be a good reason to do so. If, for example, some strategic mineral is discovered on private land, the government may take the land back. When this happens, the government gives the affected owner another piece of land or gives him or her compensation – that is, money with which to buy another piece of land.

Ministry of Lands and Housing
Matters of management of land fall under the Ministry of Lands and Housing. The Ministry has established Land Boards in every division and district to help in the management of various aspects of land. This includes controlling the purchase and sale of land, disputes over ownership and land decisions.


Land (Group Representatives) Act cap 287
This Act of Parliament came into force on 28 June 1968. Its purpose is to recognise the groups who have been recorded as owners of land under the Land Adjudication Act and their representatives.

Registrar of Ranches
This is a public officer appointed by the Minister responsible for lands, under Section 3 of the Act, who is responsible for the supervision of the administration of ranches which have group representatives.

Registration of Titles Act cap 281
This Act of Parliament came onto force on 21 January, 1920. It provides for the transfer of land by registration of titles.

The Registration of Documents Act cap 285
This Act of Parliament came into force on 15 October, 1901. It provides for the registration of all documents giving, or appearing to give, declare, limit or remove any right, title or interest, in a particular land. However, the registration of the following documents is not compulsory:

 

Minerals

Kenya has a modest endowment of minerals and precious stones. These include gold, uranium, and fluorspar. Some of these are mined on a commercial scale, while others are not. The Mining Act cap 306 of the Laws of Kenya, governs the exploration and management of minerals in Kenya.  The Act came into force on 1 October, 1940. Generally, all minerals are the property of the Government of Kenya. This is provided for in Section 4 of the Act. It is the Government, through the Commissioner of Mines, that authorises an individual or company to prospect for or mine minerals.

Mining rights
When a mineral is discovered on a private piece of land and the Government decides to have the mineral mined by the Government or given to a private company or individual, the original owner of the land is entitled to compensation. For purposes of good governance, the owner is consulted and agreement for payment is arrived at between the parties.

Water

Water resources
Water is one of Kenya’s most important natural resources. Fortunately, the country has plentiful water resources; unfortunately, they are not uniformly spread around the country. They include Lake Victoria, the second largest freshwater lake in the world. Other major lakes are Naivasha, Nakuru, Elementaita, Baringo, Turkana, Magadi and Nyabola – though not all, notably Magadi, are freshwater.  The country has also many permanent rivers, such as the Nzoia, Yala, Miriu and Tana.

Dams
The Government has built a number of dams in the country. Lakes, rivers and dammed reservoirs provide water for fishing, irrigation and production or generation of hydro-electric power. They are also used for other domestic purposes. In addition, the country has underground water. In some places the water table is quite high; while in some areas it is quite deep. Ground water is reached through the sinking of boreholes. Institutions such as schools, hospitals and hotels often use ground water to supplement other sources of water.

Management of water resources
The management of the country’s water resources falls under the Water Act cap 372 of the laws of Kenya. The Act came into effect on 7 May, 1952. The Water Act provides that water under or upon any piece of land belongs to the Government. The Minister for Water is responsible for the utilisation and control of the country’s water resources. Section 7 allows the Minister to acquire land through any means for the conservation, improvement or use of water if he or she decides it is in the public interest to do so.

The pledge by the government at Independence that every household would have water by the year 2000, has not been fulfilled. The importance of water to human life means that everyone should have access to water as a basic right. This is a major governance issue.

Catchment Boards
The establishment of Catchment Boards is provided for in Section 23(1) of the Water Act. It empowers the minister to appoint a Catchment Board in each catchment area. The duties of such a Board include advising the Water Apportionment Board on the allocation and use of existing and potential water supplies, and the adjustment, cancellation or alteration of any licence, sanction or permit.

Forests

Forest Act
Kenya has several forests. The Forests Act cap 385 of the laws of Kenya, which came into force on 1 March 1942, governs the use and management of forests in Kenya. This includes the establishment, control and regulation of central forests. 

Section 6(1) of the Forest Act empowers the Minister responsible for forests to declare a forest area or a central forest to be a nature reserve for the purposes of preserving its natural amenities and its flora and fauna. He can do this by placing a notice in the Kenya Gazette.
 

Summary

Proper management of the economy has been emphasised as the foundation for good economic governance in society. We have seen that efficient management of public resources builds citizens’ confidence in the Government and its institutions.


Notes for Facilitators

Objectives

Sequence
1. The Morality Play
The story of the father who inflicted so much unnecessary suffering on his family is intended to dramatise issues of management of public money and natural resources that are often presented in bland technical language that puts people off realising how fundamental they are to the quality and direction of their daily lives. The dramatisation is based on the actual history of mismanagement of public resources in Kenya (and most other ex-colonies!) The overall thrust is to show how undemocratic decision-making, no matter how well-intentioned, has resulted in decades of mismanagement, waste, confusion and indebtedness. The way forward is assumed to lie in greater public participation in decision-making – though how this can be structured is anybody’s guess, and may form the subject of fairly animated closing discussions – when you should take the opportunity to record key points.

So a useful sequence might be to get the background material – how government revenues are raised and spent, the laws governing use of natural resources etc – out of the way first before tackling the questions appended to the morality play. When doing this, keep in mind the following considerations:

 

 

The idea here, and elsewhere, is not to condemn our post-Independence leaderships outright but to show how they lost their way. The fact is that, for poor countries emerging from colonialism, the strategy they chose – borrow in order to jump-start development – seemed at the time the best one, and it did work to some extent. For us, the moral is that a society needs structures to ensure the mistakes of its leaders are not allowed to multiply unchecked.

 

These are serious questions because the government’s dealings with its creditors remain shrouded in secrecy. The impending resumption of IMF support is therefore an opportunity to re-examine afresh our whole relationship with our ‘development partners’ – Kenya is not quite under the ‘donor heel’ in the way Uganda and Tanzania are, but much more wide-ranging and vigorous debate is needed on the kind and extent of assistance Kenya should take on if the whole development aid paradigm is to be changed to help us meet our real needs.

In Acts 4 and 5, the father falls prey to a smooth-talking foreign investor who ultimately takes his profits and moves on, leaving him to sort out the environmental mess left behind? Is the moral of the story ‘Don’t trust foreigners’ or is there a way the father could have negotiated a deal in which the long-term cost did not cancel out the short-term benefits?  

Here, the idea is not to dismiss the whole philosophy of growth fuelled by foreign direct investment – Kenya cannot afford to wall itself off from a rapidly changing world; indeed, globalisation, as previously discussed, offers a unique opportunity to leapfrog whole stages of development and take up our place on the world stage as serious players. But the fact remains that the process of attracting foreign investment has been mystified into a technical process best left to the experts instead of being treated as a process of policy-making in which the general public and all ‘stakeholders’ have a right to participate and offer their input – to avoid a situation where the investor reaps the profits while the host country has to shoulder the long-term social and environmental costs. We have all seen, for instance, how both the Kanu and Narc governments have dismissed complaints about working conditions, safety issues and sexual exploitation in the Export Processing Zones as the work of ‘agitators’ and ‘foreign-inspired NGOs’. But the fact remains that we have little material benefit to show after a decade of ‘attracting’ investment. There are surely better ways of partnering with foreign capital and expertise, and we need a broad-based participatory process to discover them.