The Star (Nairobi)

22 November 2012

Kenya: The Task Ahead for Our Next President

column

In its issue of November 10th 2012, the New York Times had this report, filed from Mozambique by Linda Polgreen:

"When Augusto Conselho Chachoka and his neighbors heard that the world's biggest coal mine was to be built on their land, a tantalizing new future floated before them. Instead of scraping by as subsistence farmers, they would earn wages as miners, they thought.. Finally, a slice of the wealth that has propelled Mozambique from its war-addled past to its newfound status as one of the world's fastest-growing economies would be theirs.

Instead, they ended up being moved 25 miles away from the mine, living in crumbling, leaky houses, farming barren plots of land, far from any kind of jobs that the mine might create and farther than ever from Mozambique's growth miracle."

For some years now, reports of African nations whose leaders failed to use some newly-discovered source of mineral wealth for the benefit of their poorer citizens, have popped up regularly.

And the question has been repeatedly asked: Why do African leaders find it so very difficult to practice a little self-denial and discipline; to engage in a little far-sighted planning; and thus deliver to their people just a few of the services and opportunities that citizens of the more advanced nations of the world take for granted?

Well, this will soon cease to be a purely academic subject here in Kenya. Although this is something not much appreciated at the moment - outside a fairly small circle of elite policy makers and the foreign diplomatic corps - Kenya is moving swiftly towards the point where it will have a resource-based economy.

We too will soon have the same possibilities knocking at our door, as those which came to most of the African countries which have registered truly dramatic economic growth in recent years.

In short, our circumstances will not be very different from Mozambique or any of the other African nations whose economies rely not just on tourism and agriculture, but also on the export of mineral resources or oil.

We may not have the largest coal deposits in the world, but we do have lots of coal - along with oil, titanium, and natural gas. And speaking of Mozambique, here is more from the New York Times report quoted above:

"Mozambique is poised for a long economic boom, driven by its vast deposits of coal and natural gas. Vale, the Brazilian mining company, is planning to invest $6 billion in its coal operation near here, and other coal giants like Rio Tinto will soon begin producing coal in the Tete region of northern Mozambique.

Gas projects could bring in far more, as much as $70 billion, according to World Bank estimates. Mozambique's location on Africa's southeastern coast means it is perfectly positioned to feed hungry markets in southern and eastern Asia. These investments mean that income from natural resources could easily outstrip the outsized contribution foreign aid makes to its $5 billion annual budget."

All this would seem to be very good news.

For the leadership of an African country to have enough money coming in from royalties and other revenues arising from the exploitation of mineral wealth, to be able to dispense of the "begging bowl" once and for all; for such leaders to be able to gaze at impressive graphics indicating what the projected inflows are, from this resource and that; and for them to be able to borrow and plan ahead based on such economic certainties; how can that not be a good thing?

If only it were that simple. The fact is resource-based economic growth does not guarantee that poverty levels will be substantially reduced. Here is the melancholy conclusion of this New York Times article:

"In a largely upbeat assessment of Africa's growth prospects, the World Bank said in October that rapidly growing economies powered by oil, gas and minerals have seen poverty levels fall more slowly than countries without those resources.

In some nations, like Gabon and Angola, the percentage of people living in extreme poverty has even increased as growth has spiked." That just about summarizes the challenge that the next president of Kenya will face: How to translate the newfound mineral wealth and its concomitant economic growth into a better living standard for ordinary Kenyans.

And if you ask me, I would say that there is not a single one of the leading presidential candidates who has provided evidence that he or she is capable of pulling off this miracle.

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