Kenya Govt Should Resist Introduction of Fuel Subsidies

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As we in the East Africa consider how we shall ‘enjoy’ our oil windfall, I would take it upon myself to caution our government and the others in the region not to take the route of subsidizing fuel pump prices to please the masses. Here is why:
A subsidy is a cost on the government. It doesn’t make sense for the govt to deny itself such a huge chunk of revenue in a relatively stable economy like Kenya’s or Uganda’s. Zambia alone was spending $200million PA on fuel subsidies alone. Nigeria spent $8bln on fuel subsidies per year.
Subsidies are not sustainable in low GDP economies. Look at Sudan & Nigeria current unrests after govts there lifted unsustainable subsidies on fuel. Zambia has also lifted subsidies on fuel and maize. The fact is, our economies cannot sustain subsidies and our govts should resist this temptation esp after noting that we have survived this long without them.

Subsidies breed corruption esp in economies like ours where institutions of economic transparency are weak and prone to interference. I’m sure Ephraim can attest to the rot in the capital markets. Nigeria subsidies were misused by corrupt govt officials who would divert local refined fuel for export, taking advantage of loopholes to enrich themselves.
I expect the prices to come down due to market forces: high supply of crude & refined will bring down prices. Of course oil cartels will manipulate this, which is why we will need our govts to step up and properly play their regulatory role. Surely prices of around 100bob per liter of either petrol or diesel and about 50/lt of kerosene would not be too bad.
Govt should use a good fraction of the revenue to invest in renewable. After all, fossil fuels are finite. In 20-30 yrs we’ll have depleted current reserves and we’ll be looking for new energy sources for a population that will have more than doubled the current figure!


How Kenya, Somalia and allies can win the war against Al Shabaab this time around.


Al Shabaab fighters in a parade

Kenya army’s excursion into Somalia in pursuit of the Harakat al-Shabaab al-Mujahideen (or simply Al Shabaab) militia has entered into its second week. According to Kenya army, the extremists have suffered significant losses and are said to be in retreat. This, of course, is good news. But we can ensure that gains made in the coming days are more sustainable by implementing the following measures:

  • Prioritize winning the battle of the mind: Winning the hearts and support of the Somali people in the entire Horn of Africa is much more important than wiping out the militia’s strongholds. This is the only way the Somali people will not see Kenya as a foreign force violating their sovereignty and occupying their land with the help of the west. Currently, this is the rhetoric the Shabaab are using to whip up patriotic emotions and further radicalize the moderates like they have successfully done in the past. Kenya and her allies must now engage diplomats to launch a concise and sustained media campaign in the Greater Somalia region. We must define this war’s narrative, craft it into acceptable rhetoric and use Somali’s local media to win the hearts and minds of all peace-loving Somali people. There is need to explain to the Somali people why Kenya and her allies are not just pursuing her interests, but are acting in the interest of peace for the Somali nation. It would be nice if Kenya’s minister for Foreign Affairs Moses Wetangula accompanied by other Somali leaders gives interviews to Radio Shabelle in Mogadishu, for example. We must also engage the help of respected religious leaders in Kenya and Somalia to assure Somalis that it is not their religion under attack here.
  • After chasing the Shabaab out of town, what next? The international community and regional governments should launch massive state-building programs in liberated areas to scale up the capacity of Somalia’s TFG. Aid for state-building & development from partners like the US and EU must start flowing immediately. A vacuum will only lead to the rise of opportunistic elements like the clan war lords and even the Shabaab to fill the gap, taking us back to square one. Reconstruction must begin immediately with institutions for provision of security (coupled with lifting of arms embargo on Somalia) and economic development. Aid agencies must start shifting from purely humanitarian assistance to aid for development, in large amounts! A strong government in Somalia will be able to deal with extremism, piracy and address the current fractionalization of the country into the existing tiny unviable ‘mini states’. As we do this, we must ensure that all programs and projects bear the Somali government’s stamp so that the citizens begin to have confidence in their government’s capacity to govern.
  • Redefining and/or extending AMISOM mandate: In light of the recent security developments, there is need to draw a new plan for AMISOM. The proposed increase in size from current 9000 to at least 15000 should be implemented now. Areas of operation need to be extended to include strategic the towns of Baidoa, Kismayu and Afmadow. It is the high time Djibouti and Senegal sent their troops as promised. Kenya and Uganda should lead this effort at Addis to draw up a new, broader mandate for AMISOM.

In conclusion, swift, effective action is critical. Because war is a bad thing; even a seemingly just war like this one has its downside. Therefore, it must take as short a duration as possible. There are costs in terms of lives and money (better spent in developing our economy etc). Through better coordination amongst all the allies and timely logistical support, this operation should ideally be complete in under five months.

Nationbuilding in South Sudan: Lessons from Somaliland

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Of all the numerous congratulatory messages that poured in from world capitals, one stood out. This was from Hargeysa, the capital of Somaliland ; that ‘republic’ that the world just refuses to recognize. It might have been an opportune moment for the Somalilanders to remind the world of their unique situation and continuing consternation at the international community’s apathy to their cause despite making major strides at statehood, peace and democratic governance.

Somaliland Pres Ahmed Mohamed

As President SalvaKiir and his government get down to business, it would be very important for South Sudan to pay attention to Hargeysa, the only African government  that offers practical lessons for the nascent government’s most arduous task; nation- and state-building in the 21st century.

LESSON 1: Security is the foundation. Providing and guaranteeing security to all citizens and in particular businesses is paramount if any economic growth is to take place. And once businesses are making money, it automatically unlocks avenues for taxation. Somaliland realized a lucrative transit business by traders to and from Ethiopia through the Port of Berbera. The only problem with this cash cow was rampant insecurity from banditry. As long as the port and the road to it were secure, transporters could keep plying their trade and the government would collect the much-needed money to extend its control through service delivery throughout its territory. When government provides security, this acts as a compensation for civilians to give up arms. According to a 2007 Small Arms estimate, two in three civilians have a gun. As things stand, civilian disarmament is facing major challenges.

LESSON 2: Foreign aid (for development or reconstruction) is not necessarily an asset.
In fact, the lack of foreign aid for Somaliland led the authorities there to form open and accountable systems of government. The government of Somaliland knows very well that unless they account for the revenues they collect from use or Port Berbera and taxes they impose on the citizens who, through their clan leaders (the Guurti) in turn agree to maintain security in their domains, they do not have any recourse. Government would consequently go bankrupt. It is common knowledge that where governments know they can survive through means other than the taxation of citizenry as seen in countries perceived to be in good donor books (like Ethiopia), there is little or no incentive for state accountability and transparency. Such authorities also tend to be autocratic. South Sudan should focus on creating an enabling environment for local manufacturing to take root and thrive. These will offer an attractive source of revenue and also provide jobs. Relying largely on oil, in my view, will be the real ‘Resource Curse’, as Paul Collier demonstrates.

LESSON 3: Do not destroy traditional governance structures.Building on the existing traditional structures of authority is much more cost-effective and less time consuming than trying to adopt totally euro-centric models from the grassroots to the top. South Sudan can learn a lot from Somaliland’s bicameral parliament where both elected representatives and national council of elders (Guurti) share power. The Guurti has played a key role in extending security within and amongst clans; something the central government lacks the capacity to. In South Sudan, traditional chiefs played a vital role in more or less the same way as in South Sudan. However, it seems like there is a deliberate effort to do away with them and adopt a modern Eurocentric governance structure. What Salva Kiir and his government needs to understand that while this is good in the long term, the new state lacks the required human

Pres Salva Kiir, ROSS

resource to run such a system in the short term. The most critical state organs bearing the brunt of this inadequacy is the judiciary and rule of law. If the traditional role of chiefs and elders is revitalized, they can play a key stop gap role to enforce law and order and mete out justice. South Sudan has to be creative in actualizing this hybrid system that is already informally in place in several areas I personally visited.

LESSON 4: Resource redistribution. Equal redistribution of benefits accrued from state resources as well as from cooperation between the citizens and the government. There is need to set up a political system that ensures freedom and accountability. In Somaliland, the central government has to ensure that revenue from taxation of traders is equally shared throughout the country especially to education institutions. South Sudan will have to ensure the same when it comes to oil revenues. A form of ‘equalization fund’ should be put in place to bring development in adversely underdeveloped places like east of the new country (Pibor, Akobo, Pochalla counties in Jonglei State) so that they are not left behind. Decentralization of resources will be critical in stemming public discord.

LESSON 5: Do not marginalize the Diaspora. If there is a constituency that has provided invaluable support to Somaliland, it is its huge diaspora spread out in Europe and North America. They have also helped to push for their motherland’s agenda in the international scene through lobbying. As South Sudan begins its task of state-building, they will need bright people with a flair for thinking global and acting local. Australia, US and UK boast large numbers of South Sudanese communities, most of them in colleges and private sectors of their adopted countries. As I noted in my earlier blog, the current composition of government officials is heavily skewed in favor of former war generals and ex-SPLA top brass. The thinking is that those in the diaspora ‘abandoned’ their people during the war and therefore shouldn’t return to claim leadership positions now that there is peace. A radical paradigm shift is required. Pres Kiir and his government must view the South Sudanese Diaspora as a huge asset and partner in reconstruction of the new country and as such, put in place to enhance this cooperation.

In conclusion, it is my personal observation that the AU needs to seriously put in place a procedure to allow Somaliland sovereignty. After all, theirs is a cause with reasonable historical justification for sovereignty.

To Secure The Horn, Stabilize Somalia

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A young Somali girl

The Horn of Africa is the largest conflict system in the world and has wrought untold suffering to its more than 170 million inhabitants. Numerous international interventions and mediations have usually resulted in weak authorities and peace deals whose signatories have become their very spoilers, leaving the region steeped in an unending cycle of civil and at times interstate conflicts. Economically, the Horn has some of the worst off Least Development Countries according to the latest Human Security Index. The Sudan remains a tinderbox in the region as it heads to a plebiscite on separation in January 2011. Somalia is disintegrating as the Al Shabaab and their allies step up their insurgency thus exacerbating the fragility of the transitional government which in turn increases maritime insecurity in the Gulf of Aden. Some observers believe that Eritrea’s support for the Somalia insurgents continues despite sanctions, while its border stand-off with Ethiopia still raises security concerns. As the Kenyan 2007/8 elections showed, the region’s weak political institutions are not able to handle the storms that come with competitive democratic processes due to underlying structural failures. The regional landscape shows a rather grim outlook.

There are several major security threats in the Horn of Africa region, key among them weak states, preponderance of small arms and light weapons, Al Qaeda-linked extremist groups, intra- and interstate resource disputes and a

Al Shabaab militia in a training session

case of bad neighborhood. These are the underlying causes of the obvious symptoms like numerous armed groups, maritime piracy, secessionist rebellions and political violence. Gaining a clear understanding of Somalia’s (in)security dynamics, ethno-political landscape, spillover effects of the conflict, role of foreign extremist groups and previous regional intervention efforts will provide critical insights that should guide cogent, practical policy formulation for this region. Somalia singularly holds the key to securing and stabilizing the Horn of Africa. Therefore, any meaningful intervention by the international community and especially the US government and non governmental agencies must address Somalia as the epicenter of the Horn of Africa conflict system. Indeed, the real ‘axis of instability’ comprises Somalia, Eritrea and Sudan. The failure to officially recognize Somaliland’s statehood despite the territory showing appreciable democratic gains with two elections described by leading observers as reasonably free and fair has only exacerbated the situation. Clearly, the international community needs to rethink the issue of Somaliland’s statehood and putting in place mechanisms to help the other breakaway region of Puntland along this path.

Piracy off the coast of Somalia has greatly affected maritime trade in the Gulf of Aden

If these two regions are stable, there is bound to be a ‘spillover of stability’ into the greater Somalia territory. The international community should by now have come to appreciate that the cost of attempting to reunite the whole of Somalia into one country is too high. Notably, the US’s limited, indirect diplomacy and largely militaristic support to the transitional Somalia government has clearly not had the desired effect. Instead, perhaps due to its poor planning or execution, it has resulted in solidifying hitherto belligerent extremist groups that have managed to whip up nationalistic sentiments against the weak government. Thriving maritime piracy of the coast of Somalia has triggered a knee-jerk response of dozens of navy ships from foreign countries patrolling the Gulf of Aden. This paper will show that the only permanent solution lies on shore with stable and legitimate administrations, not on the sea.

USAID must focus more on providing much needed development aid so as to reduce the recruiting base for the multitude of rebel movements whose main drive is greed as opposed to genuine grievance. Participatory and equitable development consolidates security, what Robert Zoellick calls ‘securing development’. Continuous support of administrations that lack legitimacy in the eyes of their citizenry is not sustainable in the long run and only stokes antigovernment sentiments which the rebels capitalize on. Aid for development of the region must therefore be more than military aid. The US and EU must not limit their intervention in the Horn of Africa conflict to the global war on terror because this only results in militarizing their foreign policies while ignoring the real underlying economic causes.

Crafting better cooperation between AFRICOM and local Horn of Africa security agencies is best placed to address the overall security threat in the Horn. The United States should seriously consider moving AFRICOM from its base in Stuttgart, Germany to Northern Kenya. Recent Al Shabaab bombings in Uganda coupled with threats of the same in Burundi and Kenya have no doubt left the security apparatus in this region feeling vulnerable; therefore a window exists which the US can take to convince Kenya to host AFRICOM. Not only will this enable the US military to monitor and respond to the security situation, it will also curtail a looming spike in military spending of these states especially in light of the increasing security threats from Somalia and Eritrea.

Finally, the issue of small and light weapons in the post-conflict Sudan should

A large amount of SALW in the Horn are believed to come in through the long and lawless coast of Somalia

addressed through a better coordinated DDR program focused on reintegration of thousands of former combatants especially in the restive Darfur and South Sudan regions. A recent Small Arms Survey report underlines the importance of this, with clear indications that this will be the biggest impediment to the stability of a future South Sudan republic, should the southerners vote for separation in January 2011.

Clearly, a total change in policy towards this region is long overdue.