Business Daily (Nairobi)
Jeremiah Owiti
11 November 2009
opinion
In developing countries, investment is a word often bandied about, and investors are the geese that lay the golden eggs, or so the masses have been led to believe.
As such, there's always a red carpet laid out for investors, and a host of incentives on offer including tax breaks, free titled land, and financial support on concessionary terms.
On the basis of the starring role these investors, mostly foreign, purportedly played in the rapid growth witnessed in former third world economies such as Malaysia and Singapore, they have become the hottest fad in contemporary development discourse and planning.
It is no coincidence therefore that in Kenya, there is an entire bureaucracy in place in the form of an investment authority that has been set up to pursue, promote and guide investments.
Vision 2030 also gives considerable attention to the articulation of investment plans in sectors considered to be drivers of the economy.
Manufacturing, tourism, and agriculture in particular stand out.
However, this obsession with foreign investment can be misplaced and harmful.
Such is the obsession with investments that all other equally compelling arguments, including potential negative environmental and social impact, sustainability and the need for people-centered development have been relegated to the back burner or totally swept under the carpet.
This obsessive behaviour approximates that observed during the implementation of previous development fads such as import substitution, industrialisation and export-led industrialisation, with little or no systematic effort put into scrutinising potential flaws in these 'infallible' development doctrines.
In the fullness of time, the outcomes of these doctrines were inappropriate technologies, empty public coffers, unaffordable basic commodities and disillusioned and poorer masses, some of whom had lost control of productive assets such as land permanently and irreversibly.
The key lesson missed from the experience of Malaysia, South Korea and Singapore is the three pillars that produced sustainable industrialisation in these countries, namely development of indigenous human capital, appropriate and transferrable technology and a majority or at least significant local shareholding.
Consider the sugar sector, for example.
The sugar sub-sector for some strange reason appears to be the arena most susceptible to the vagaries of dubious investments, the large majority of which have no sweetness to them, particularly for displaced people, farmers and workers.
Two recent and highly controversial investments in the sugar sector, one actual, the other potential, bring to fore the dilemma that both government and citizens alike need to confront in the hallowed halls of investment.
As the parliamentary committee on agriculture, livestock and cooperatives chaired by Naivasha MP John Mututho discovered to its consternation, Kwale International Sugar Company (Kisco) had acquired 15,000 acres from locals without paying compensation.
The company had neither produced documents validating its authenticity, nor made provision for shareholding by locals.
Kisco demanded title deeds from people wishing to be outgrowers despite the fact that the majority of the people in the area are squatters.
In a move that led to the further disempowerment of the people, the agriculture minister blocked compensation for the evicted residents whereas, as the parliamentary committee rightfully noted, anybody who is evicted from his land must be compensated by law.
The committee therefore advised Kisco to fold up its sugar operation, given that the land which it is occupying is capable of producing grain worth 3.6 billion annually using drip irrigation.
And if the Kisco saga is a saddening account of an investment gone wary, then the tale of a private company by the name Sukari investments ltd which is seeking to establish a sugar milling factory in Nyarongi division of Ndhiwa constituency is nothing short of shocking.
Glaring omissions
This particular investor has confounded industry watchers and the people of Ndhiwa constituency with a brazen attempt to erect a sugar factory corruptly and forcefully in Nyarongi division without following due process, conducting necessary consultations or obtaining necessary licenses and authorisations.
There has been no consultation with the communities owning the lands targeted for the factory whatsoever.
The investor has not obtained a licence from the sugar board, has conducted no feasibility study or environment impact study and has no official titles to land.
Despite this glaring omissions, this investor's earth-moving equipment of the arrived at Riat market in mid August ready to begin work on the project.
Public protests however forced the drivers of the vehicles to abort the mission.
This development followed the issuance of notices in the media of intention to change user of various plots in Nyarongi division from agricultural to industrial, by Homabay county council, in abdication of its role as trustee of communities on land matters.
Subsistence agriculture
On Saturday October 31, the area MP invited agriculture minister William Ruto to preside over the groundbreaking ceremony for the factory in early November.
Noteworthy is the fact that Nyarongi division, the poorest in the constituency, produces negligible amounts of sugarcane, and has a high population density primarily dependent on subsistence agriculture.
All chiefs and their assistants in Nyarongi division have reportedly been exhorted to ensure land is obtained for the factory.
The Kenya Sugar Board, the provincial administration, and Nema remain silent as cardinal investment regulations and procedures are flagrantly violated.
The chairman of the sugar board Mr Okoth Obado participated as a guest on a vernacular radio station show, Ramogi, championing the interests of this investor on the night of 29th September.
He supposedly said the investment is so good it does not require a feasibility study.
Owiti is director, Centre for Independent Research.
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