‘Tis the season for presents and merrymaking and no one got a better deal than Kenya’s president. Mwai Kibaki’s gift was a 180.7 percent pay rise above what he could ever possibly achieve. It’s wonderful when Santa comes to town.
Kenya’s economy is expected to grow at about 4.9 percent in 2007 according to the International Monetary Fund (IMF) from 3.3 percent in 2006. If the December 2007 election doesn’t mar investment growth, and the 4.9 percent estimate is achieved, Kibaki would have been given a salary that is 180.7 percent above his potential performance.
Perhaps the 75-year-old president-millionaire is worried that he may not win the next election and the little something extra in his Christmas stocking is something of a golden handshake. If this is the case, perhaps he shouldn’t be getting an increase at all as surely a president who has surpassed his mandate, which I assume he must have given his now significantly augmented compensation, would get voted back in?
Don’t get me wrong, I agree that presidents should be remunerated at an acceptable level, especially as CEOs earn increasingly ridiculous packages across the globe, but the danger here is enormous as the vote of confidence (someone has to believe Kibaki is worth the extra cash) can never be met. In a sense then, the pay rise is almost willing the president to fail as the economy is never going to grow anywhere near 185.6 percent. All of a sudden this ‘present’ seems just a little wicked.
Maybe this is why Kibabaki decided on Wednesday to turn down the massive hike, an increase recommended at a meeting he chaired, as "despite the major strides that the economy has made, there are other priority projects in need of urgent funding".
The good news is that this move will probably help to keep other parliamentarians' stockings from tearing when their increases come under review. Kibaki now has the high-ground; he doesn't need the extra money and neither to his MPs. Santa can stay at home.
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Friday, December 15, 2006
Friday, December 08, 2006
Millions of Africans now living on $2 a day...
Millions of Africans live on less than a dollar a day. Depending on what events are happening internationally (wars, sports etc), I generally get at least one report per day saying that food aid needs to be increased to the World’s poorest continent with the greatest irony being that Africans may not even be able to import their own food back once they’ve exported it.
The Southern African Development Community is facing a potential sugar supply crisis, but still Zambia, Zimbabwe, Mozambique and Malawi have said they will not allow Botswana, Lesotho and Namibia and other member states to import from outside the region in order to “protect their industry”. Protect what? You can’t sell sugar you don’t have.
The consequence: you squeeze supply and the price goes up. Perhaps now millions of Africans are living on only $0.95 per day.
Clearly Kenya’s blocking of Ethiopian Airlines has meant prices are higher than they need to be on monopolised routes. Poorly implemented protectionist policies makes African countries more expensive than they need to be.
So the question is how do we make Africa cheaper? How do we make $1 worth $1.05?
We can start by making sure that protectionist policies that operate to protect industries don’t do so at the expense of people within the country. Nigeria’s 120 percent tax on rice imports means that Nigerians are effectively paying almost double what they should be paying.
And moving on to $1.10? Oddly enough I saw part of the answer on my way to work this morning. On two occasions taxis stopped illegally just inside blind corners backing up traffic. Sure the people in the taxis had the convenience of not needing to walk an extra 25m, but convenience costs. Twenty cars had to break and then accelerate unnecessarily. Forty people had their hours of productivity marginally cut, while only two gained.
There are two major consequences to not using infrastructure properly (i.e. in line with what infrastructure was designed for). The first is that the maximum benefit cannot be attained and the second is that maintenance costs are likely to go up.
The other option of course is to build infrastructure and systems that operate more specifically to what is required. Nigeria’s rail expansion to stop congestion in Lagos is just such an example and, if successful, will help increase the potential for productivity. Similarly, the lights that were switched on in Monrovia for the first time in 16 years allows people to work at night and thereby boosts the potential for productivity.
Millions of Africans are now living on between $1.15 and $1.20 per day. If other inefficiencies are removed, like illegal taxes, this can be pushed even higher.
So we’ve had at least a 15 percent increase in ‘income’, which far exceeds Africa’s average growth of around 5 percent. It may even be possible to double this with a little bit of long-term planning.
Millions of Africans live on $2 per day. Well, it’s a start...
The Southern African Development Community is facing a potential sugar supply crisis, but still Zambia, Zimbabwe, Mozambique and Malawi have said they will not allow Botswana, Lesotho and Namibia and other member states to import from outside the region in order to “protect their industry”. Protect what? You can’t sell sugar you don’t have.
The consequence: you squeeze supply and the price goes up. Perhaps now millions of Africans are living on only $0.95 per day.
Clearly Kenya’s blocking of Ethiopian Airlines has meant prices are higher than they need to be on monopolised routes. Poorly implemented protectionist policies makes African countries more expensive than they need to be.
So the question is how do we make Africa cheaper? How do we make $1 worth $1.05?
We can start by making sure that protectionist policies that operate to protect industries don’t do so at the expense of people within the country. Nigeria’s 120 percent tax on rice imports means that Nigerians are effectively paying almost double what they should be paying.
And moving on to $1.10? Oddly enough I saw part of the answer on my way to work this morning. On two occasions taxis stopped illegally just inside blind corners backing up traffic. Sure the people in the taxis had the convenience of not needing to walk an extra 25m, but convenience costs. Twenty cars had to break and then accelerate unnecessarily. Forty people had their hours of productivity marginally cut, while only two gained.
There are two major consequences to not using infrastructure properly (i.e. in line with what infrastructure was designed for). The first is that the maximum benefit cannot be attained and the second is that maintenance costs are likely to go up.
The other option of course is to build infrastructure and systems that operate more specifically to what is required. Nigeria’s rail expansion to stop congestion in Lagos is just such an example and, if successful, will help increase the potential for productivity. Similarly, the lights that were switched on in Monrovia for the first time in 16 years allows people to work at night and thereby boosts the potential for productivity.
Millions of Africans are now living on between $1.15 and $1.20 per day. If other inefficiencies are removed, like illegal taxes, this can be pushed even higher.
So we’ve had at least a 15 percent increase in ‘income’, which far exceeds Africa’s average growth of around 5 percent. It may even be possible to double this with a little bit of long-term planning.
Millions of Africans live on $2 per day. Well, it’s a start...
Wednesday, December 06, 2006
Museveni bets on France AND Rwanda losing
I have been trying to understand the issue between Rwandan President Paul Kagame and France for a while now. Last week Kigali broke ties with Paris after French judge Jean-Louis Bruguiere called for Kagame to be tried for alleged complicity in the death of former president Juvenal Habyarimana, which was thought to have led to the 1994 Rwandan genocide.
While such a major charge against the man who is believed to have brought Rwanda back to some level of stability could have negative spin-offs, it seems odd that Kigali would act in this way given its efforts to reconstruct and reconcile the country as part of its innovative Gacaca process. Surely Kagame could simply subject himself to the Gacaca court, be found not guilty, and move on instead of making all this fuss? All this needless bother only helps to make it look like something is actually amiss. The idea that France calling for a head of state to stand trial ‘is just not cricket’ is quite short-sighted for a continent that is still trying to govern itself after almost 50 years of practise.
Perhaps that’s just where the problem is: Africa needs to show that is can rule. In this light, chasing France out is no more than a show of strong diplomacy and Rwanda, realising that former colonial allies almost always constitute the bulk of trade, will soon welcome the European foe back, albeit only after an official apology by Paris of course. Schools will reopen and the embassy will once again stock Champagne instead of sparkling wine and all the sour grapes will be a thing of the past.
But perhaps not so. While Rwanda is still trying to mend the divides between its own people, its eastern neighbour has sought the opportunity to spin some anti-European sentiment. Ugandan President Yoweri Museveni clearly saw the gap for rhetoric and got up on his perch and said France must leave Kagame alone. In some ways Museveni is right, Rwanda is sovereign and therefore France has no right over it, however, in many other areas he is dreadfully wrong. Saying that Europe (France) is the problem isn’t going to solve anything and may lead to a backlash where everything ‘European’ is destroyed. Surely the self-proclaimed champion of human rights in Africa doesn’t want his people to sit with less infrastructure and fewer opportunities.
The same applies for Rwanda. If Rwandans start seeing France as an enemy and some misguided individuals decide to torch French schools, the Central African nation will suffer. Sure, France would lose a small hold in terms of expanding its culture, but ultimately, Rwandans will find themselves in a position of fewer opportunities for education and fewer opportunities for trade. Diplomacy and rhetoric have their pitfalls
While such a major charge against the man who is believed to have brought Rwanda back to some level of stability could have negative spin-offs, it seems odd that Kigali would act in this way given its efforts to reconstruct and reconcile the country as part of its innovative Gacaca process. Surely Kagame could simply subject himself to the Gacaca court, be found not guilty, and move on instead of making all this fuss? All this needless bother only helps to make it look like something is actually amiss. The idea that France calling for a head of state to stand trial ‘is just not cricket’ is quite short-sighted for a continent that is still trying to govern itself after almost 50 years of practise.
Perhaps that’s just where the problem is: Africa needs to show that is can rule. In this light, chasing France out is no more than a show of strong diplomacy and Rwanda, realising that former colonial allies almost always constitute the bulk of trade, will soon welcome the European foe back, albeit only after an official apology by Paris of course. Schools will reopen and the embassy will once again stock Champagne instead of sparkling wine and all the sour grapes will be a thing of the past.
But perhaps not so. While Rwanda is still trying to mend the divides between its own people, its eastern neighbour has sought the opportunity to spin some anti-European sentiment. Ugandan President Yoweri Museveni clearly saw the gap for rhetoric and got up on his perch and said France must leave Kagame alone. In some ways Museveni is right, Rwanda is sovereign and therefore France has no right over it, however, in many other areas he is dreadfully wrong. Saying that Europe (France) is the problem isn’t going to solve anything and may lead to a backlash where everything ‘European’ is destroyed. Surely the self-proclaimed champion of human rights in Africa doesn’t want his people to sit with less infrastructure and fewer opportunities.
The same applies for Rwanda. If Rwandans start seeing France as an enemy and some misguided individuals decide to torch French schools, the Central African nation will suffer. Sure, France would lose a small hold in terms of expanding its culture, but ultimately, Rwandans will find themselves in a position of fewer opportunities for education and fewer opportunities for trade. Diplomacy and rhetoric have their pitfalls
Tuesday, December 05, 2006
'Maintenance is for people who think too small’– Africa
My uncle travels widely in Africa, having been involved in the planning of many mobile telecoms installations on the continent, and he always has a story about how governments fail to maintain what they have.
His favourite story is of an airport he once landed at in East Africa. His take on the tale is that rather than maintaining the old airport, a new one was simply built next to the old one, leaving the old one to become a ruin of some-or-other previous era.
Similarly, my uncle tells me of tarred roads, which – almost organically – became gravel roads before retuning to thick forests. How true any of this is I can’t say, but what I can say, knowing that I drive specific lines to miss potholes on my way to work everyday, is that public servants maybe aren’t as enthusiastic about maintenance as the should be.
I remember when I was in New York last year. The Mayor got quite upset that a pothole he drove through yesterday wasn’t fixed today. Perhaps then the enthusiasm needs to come from ‘the top’.
Zambia’s massive road rebuilding plan was nipped in the bud by a European Union donor community, which said that Zambia should look at a programme of road maintenance rather than building new roads unnecessarily.
The government, not jumping for joy at the simpler prospect of just fixing their roads, was left oddly sullen by this. It seems there may be more to this than maintenance being a ‘dirty word’.
It can be that the opportunity of ‘rebuilding’ may make governments feel that they are in fact adding something new to the country, i.e. cementing their purpose, though I doubt we can attribute all this to a simple case of a minority complex. And I think its safe to say that Africa needs 'building', not 're-building'. There's no point in doing things twice.
The more possible reality is that big programmes (think short-tem injection) create many short-term jobs, while propping up growth. The once scramble for Africa by Royals has been replaced with a scramble for the ‘big number’ and the higher the number the better, no matter how sustainable it is.
So while these governments (like many governments around the world) look for some rosy stats for the next election, the sad reality is that without maintenance its all rather in vain. Things fall apart if not looked after making the potential to cement a legacy unlikely.
The EU, although not explicit about this, was probably recognising that maintenance programmes will create long-term sustainable jobs because roads always need fixing, unless, of course, you live in Germany and the concrete is extra thick.
Maintenance, that dirty ‘m’ word and what does my uncle always finish his stories with showing his obvious bias to telecommunications? No state can function without communications and transport. No country has a chance of economic growth without it and you know, as much as I'd like thick forests to cover Africa, I think he's probably right.
His favourite story is of an airport he once landed at in East Africa. His take on the tale is that rather than maintaining the old airport, a new one was simply built next to the old one, leaving the old one to become a ruin of some-or-other previous era.
Similarly, my uncle tells me of tarred roads, which – almost organically – became gravel roads before retuning to thick forests. How true any of this is I can’t say, but what I can say, knowing that I drive specific lines to miss potholes on my way to work everyday, is that public servants maybe aren’t as enthusiastic about maintenance as the should be.
I remember when I was in New York last year. The Mayor got quite upset that a pothole he drove through yesterday wasn’t fixed today. Perhaps then the enthusiasm needs to come from ‘the top’.
Zambia’s massive road rebuilding plan was nipped in the bud by a European Union donor community, which said that Zambia should look at a programme of road maintenance rather than building new roads unnecessarily.
The government, not jumping for joy at the simpler prospect of just fixing their roads, was left oddly sullen by this. It seems there may be more to this than maintenance being a ‘dirty word’.
It can be that the opportunity of ‘rebuilding’ may make governments feel that they are in fact adding something new to the country, i.e. cementing their purpose, though I doubt we can attribute all this to a simple case of a minority complex. And I think its safe to say that Africa needs 'building', not 're-building'. There's no point in doing things twice.
The more possible reality is that big programmes (think short-tem injection) create many short-term jobs, while propping up growth. The once scramble for Africa by Royals has been replaced with a scramble for the ‘big number’ and the higher the number the better, no matter how sustainable it is.
So while these governments (like many governments around the world) look for some rosy stats for the next election, the sad reality is that without maintenance its all rather in vain. Things fall apart if not looked after making the potential to cement a legacy unlikely.
The EU, although not explicit about this, was probably recognising that maintenance programmes will create long-term sustainable jobs because roads always need fixing, unless, of course, you live in Germany and the concrete is extra thick.
Maintenance, that dirty ‘m’ word and what does my uncle always finish his stories with showing his obvious bias to telecommunications? No state can function without communications and transport. No country has a chance of economic growth without it and you know, as much as I'd like thick forests to cover Africa, I think he's probably right.
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