https://www.youtube.com/watch?list=UUUyY2nS9jtBeLLut53JaKqA&feature=player_embedded&v=NuhovSZLTts
Saturday, 30 November 2013
Friday, 29 November 2013
Kenya: So Rich Yet So Poor, Is Turkana Selling Its Due?
Article featured in the Star newspaper on 29 November 2013
see: http://allafrica.com/stories/201311290270.html
Imagine a place that is linked to the origin of humankind; is one of the world's leading archaeological sites and is now a World Heritage Site; has preserved wildlife fossils, which include the giant tortoise and the 20-foot long crocodile; is home to one of the smallest tribes on earth who still wear goat or fish skins and accessorize with fish bones or fish teeth; has the world's largest permanent desert lake which is also the world's largest alkaline lake; has an island with scenic crater lakes each harbouring its own kind of animal species like flamingos, crocodiles and tilapia; has sand dunes that measure over 40 feet high that are surrounded by palm trees; has a forest;is rich in wild life; has commercially viable oil deposits and a lot of water. Well, what do you think about this place? I think it is too good to be true. I think it should be one of the world's biggest attractions.
Unfortunately it is not. The people from this place, when compared to a Kenyan of average status (which is not that great), are two times poorer; fifteen times less likely to get a formal job; thirteen times less likely to earn more than seven thousand two hundred shillings (Ksh 7,200) per month; four times less likely to learn how to read and write; seventeen times less likely to have a primary education; sixty three times less likely to have a secondary education or above; three times less likely to have access to clean water; sixty three times less likely to have access to sanitary facilities; eighty two times less likely to live in a house with a cemented floor or a mabati roof; three hundred and thirty six times less likely to live in a house with stone/brick walls; thirty four times less likely to cook with cooking gas (LPG), bio fuels or electricity; and no chance on using electricity.
These are a lot of 'less likelies' for such a rich place but regrettably, these are the contradictions a person born in Kotaruk/Lobei in Loima Constituency, Turkana County, has to live with.
While on one hand the opportunities and resources in this county can be a blessing and thus the county has the potential to make incomparable sums of money to kick-start economic growth, eradicate poverty, raise literacy levels, improve health indicators, ensure food security, access to clean water and sanitation, create jobs to increase household incomes and purchasing power, enable the transfer of technology, improve infrastructure and encourage the flourishing of other related industries; on the other hand, these resources could be a curse.
see: http://allafrica.com/stories/201311290270.html
Imagine a place that is linked to the origin of humankind; is one of the world's leading archaeological sites and is now a World Heritage Site; has preserved wildlife fossils, which include the giant tortoise and the 20-foot long crocodile; is home to one of the smallest tribes on earth who still wear goat or fish skins and accessorize with fish bones or fish teeth; has the world's largest permanent desert lake which is also the world's largest alkaline lake; has an island with scenic crater lakes each harbouring its own kind of animal species like flamingos, crocodiles and tilapia; has sand dunes that measure over 40 feet high that are surrounded by palm trees; has a forest;is rich in wild life; has commercially viable oil deposits and a lot of water. Well, what do you think about this place? I think it is too good to be true. I think it should be one of the world's biggest attractions.
Unfortunately it is not. The people from this place, when compared to a Kenyan of average status (which is not that great), are two times poorer; fifteen times less likely to get a formal job; thirteen times less likely to earn more than seven thousand two hundred shillings (Ksh 7,200) per month; four times less likely to learn how to read and write; seventeen times less likely to have a primary education; sixty three times less likely to have a secondary education or above; three times less likely to have access to clean water; sixty three times less likely to have access to sanitary facilities; eighty two times less likely to live in a house with a cemented floor or a mabati roof; three hundred and thirty six times less likely to live in a house with stone/brick walls; thirty four times less likely to cook with cooking gas (LPG), bio fuels or electricity; and no chance on using electricity.
These are a lot of 'less likelies' for such a rich place but regrettably, these are the contradictions a person born in Kotaruk/Lobei in Loima Constituency, Turkana County, has to live with.
While on one hand the opportunities and resources in this county can be a blessing and thus the county has the potential to make incomparable sums of money to kick-start economic growth, eradicate poverty, raise literacy levels, improve health indicators, ensure food security, access to clean water and sanitation, create jobs to increase household incomes and purchasing power, enable the transfer of technology, improve infrastructure and encourage the flourishing of other related industries; on the other hand, these resources could be a curse.
World over, the resource contest for opportunities by the elite most often leads to poor governance, high corruption, a culture of rent-seeking, devastating health and environmental consequences at the local level and intensified conflict to divert attention as the resources are looted. This might be already happening in Turkana County.
The southern part of the county is under siege with armed militiamen from the neighbouring Pokot community recently holding three police camps hostage. While it may be assumed this is the usual age old difference over land, pasture, water and cattle, it is important to interrogate the extent to which there is political will to ensure that the abundant resources here mutually benefit all the people of Turkana.
Recently some companies prospecting for oil in Turkana County applied to be exempted from paying taxes both to their country of origin and the Kenyan Government. They are known to have built a few schools, health centres and sunk a few boreholes in Turkana County. On the basis of these they argue that they should be allowed to extract Turkana County oil without paying their dues to either the County Government or the National Government. Should this be allowed? Corporations are known to spend little money on local communities in what is commonly known as 'Corporate Social Responsibility', then proceed to extract valuable natural resources worth billions of dollars after which they leave. In most of these cases the local communities are left worse off because they were not skilled enough to take up the opportunities provided. The infrastructure left often collapses and the unchecked extraction of natural resources leads to extreme environmental destruction.
It is important that the Turkana County Government is cognizant of their role in providing adequate social services to improve the welfare of their citizens. Sustainability and equitable distribution of resources should therefore be at the forefront otherwise the custodians of the birthright of the Turkana people will be sold off for the proverbial 'bowl of soup' and the owners forever remain condemned to poverty and lack.
Katindi Sivi-Njonjo is an African Futurist, a Social Researcher and Policy Analyst, a Gender Budgeting Practitioner and the Programme Director at Society for International Development (SID) - East Africa. Katindi was instrumental in the recent launch of "Exploring Inequality in Kenya" Report by SID East Africa and The Kenya National Bureau of Statistics (KNBS). For more information about the report, please visit: http://inequalities.sidint.net/kenya/
Friday, 2 August 2013
What Pre-oil Economies in Africa must Consider!
First featured on Foresight for Development Website:
http://www.
Last Updated on Thursday, 01 August 2013 11:49
Strong symbolism is attached to oil since this raw material was the foundation of economic systems in the 20th century and continues to be the fuel of global industrialization in the 21st. It is a key to the hierarchy that exists between countries from the richest to the least advanced. An oil based economy also involves incomparable sums of money (Magrin & Vliet, undated). That is perhaps why recent discoveries of commercially viable deposits of oil in the East African region and ‘the probability of the region becoming a global player in oil production’ (United States Geological Survey [USGS], 2012) has caused a lot of excitement.
It is envisaged that this ‘black gold’ could eradicate chronic poverty due to a likely increase in exports that results in additional revenue to finance poverty alleviation (DI, 2012 July 3). It could also enhance economic growth and the creation of jobs, enable the transfer of technology, improve infrastructure and encourage the flourishing of other related industries (Karl, 2007 January). After all, Africa’s oil exporting countries, although have the least diversified economies, have among the continents highest GDP per capita (MGI, 2010 June) as illustrated in figure 1.
Figure 1: Africa’s Diverse Growth Paths
Source: McKinsey Global Institute [MGI], 2010 June
For Kenya, it is envisaged that oil discovery will contribute towards the transformation of Kenya into a middle income country by 2030. According to an interview with Sumayya Athmani, Chief Executive Officer, National Oil Corporation of Kenya - featured by the 2013 Africa Energy Yearbook, petroleum is the single largest import by Kenya, accounting for 21% of the country’s total imports. Own production will certainly help in management of the balance of payments and stemming loss of foreign exchange. A commercial discovery would also spur a whole new economic sector and industrial development. An East African regional partnership for infrastructure development is also anticipated with South Sudan and Somali also having shown interest. There is already in place a regional refinery development plan of a gas pipeline from Tanzania to serve countries in the region. The Lamu Port and South Sudan Ethiopia Transport (LAPSSET) Corridor project which is being championed by Kenya is also aimed at regionally integrating petroleum and transport infrastructure. With the biggest obstacle being old and inadequate infrastructure hence significant bottlenecks in the effective distribution of petroleum in Kenya, the projects aim at positioning Kenya as the ultimate global petroleum logistics hub in the region.
While some countries rich in oil resources like Malaysia and Indonesia were able to improve economic performance, the experience of almost all other oil-exporting countries to date illustrates few of these benefits. According to Karl (2007, January: 2), ‘the consequences of oil-led development tend to be negative, including slower than expected growth, barriers to economic diversification, poor social welfare performance, and high levels of poverty, inequality and unemployment. Furthermore, countries dependent on oil as their major resource for development are characterized by exceptionally poor governance and high corruption, a culture of rent-seeking, often devastating economic, health and environmental consequences at the local level, and high incidences of conflict and war. In sum, countries that depend on oil for their livelihood eventually become among the most economically troubled, the most authoritarian, and the most conflict-ridden in the world’.
The challenges are certainly not due to the existence of the resource per se but due to the structures and incentives that oil dependence creates. For this reason, it is worth examining some of the assumptions pre-oil economies like Kenya make when they discover such resources. This is important for purposes of averting the proverbial ‘paradox of plenty’ or the ‘resource curse’ so that this ‘black gold’ once exploited, can be benefitial to the country.
Kenya is categorized as a transitional economy whose GDP per capita is lower than the oil led or the diversified economies (see figure 1), but the economy is growing rapidly. Given that by the year 2020, the world oil consumption will rise by about 60% and transportation will be the fastest growing oil-consuming sector, there is rising global demand for oil. Expanding resource exports through oil is therefore an opportunity to ‘turbo-charge’ growth (MGI, 2010, June). However various factors can reverse that opportunity.
Oil exporting countries face the macroeconomic instability that is linked to fluctuations in the global price of oil (Magrin & Vliet, undated). According to Karl (2007, January), the price volatility of oil is usually twice that of international primary commodities. As a result, oil economies are likely to face more frequent economic shocks and are thus susceptible to acute boom-bust cycles. Thus despite significant rises in per capita income, over the past several decades, all oil-dependent countries have seen the living standards of their populations drop, and sometimes drop very dramatically from the initial levels.
During the oil boom, windfall gains provoke a type of “feeding frenzy”. Budgets are based on optimistic projections and therefore the over investment and over spending creates vulnerability to commodity prices. When the never anticipated reversal of circumstances occurs due to the price volatility of petroleum, major economic tensions are created as government finds it difficult to moderate spending (Karl 2007, January). According to Soares de Oliveira (2007), oil states tend to be heavily indebted because they use their oil resources as guarantees during periods of busts. The funds from loans frequently land in private hands while the problem of debt repayment is left to the public thus affecting economic performance.
The loss of fiscal control measured by overspending and soaring debt are among the ingredients that cause unstable macro-economic environments.
2. There will be political will to ensure mutual benefit for all
According to Sala-i-Martin and Subramanian (2003), oil more than any other resource destabilizes institutions and absolutely corrupts. In fact the Corruption Perceptions Index (CPI) created by Transparency International each year ranks the oil states of the Gulf of Guinea among the ten worst. Because windfall gains that arise from petroleum encourage rent-seeking behavior, the state becomes a type of ‘honey pot’ in which competing interests try to capture a significant portion of resource rents by capturing portions of the state. A vicious cycle results in which all actors try to gain parts of the bureaucracy while governments, in turn, reward their supporters by funneling favors their way. This greater spending on patronage, in turn, weakens existing pressures for representation and accountability (Karl, 2007 January).
Karl further asserts that rulers often support policies that produce personalized rents even if these policies result in lower overall social welfare and because they need to share these rents with supporters and subordinates, the level of distortion can be very great. Officials tend to finance mega projects in which payoffs can be more easily hidden and the collection of bribes is easier like infrastructure and defense projects. Oil wealth also creates a class of rulling elite that consolidates power to benefit this small group of individuals. It is therefore not surprising that oil resources are closely associated with military spending and the creation of extensive repressive apparatuses. This is in part due to the fact that the rulling class are wary of letting oil reserves fall out of the control of their allies and into the hands of possible opposition groups.
Natural resources like oil will therefore have a negative impact on both economic growth and income levels of the population if governance institutions are weak.
3. The existence of oil and the internal social and demographic trends will help spur growth
According to McKinsey Global Institute (MGI, 2010 June), Africa’s long term growth will be lifted by the growing labour force, urbanization and a rise in middleclass consumers. With provision of education and skills, this large workforce could account for a significant share of production and consumption.
However, according to Karl (2007, January) most jobs created by the petroleum industry are temporary or seasonal in nature, and because the growth in jobs generally occurs only during the exploration phase as land needs to be cleared, equipment transported, roads, pipelines and other infrastructure constructed, the industry actually offers comparatively few jobs over time than initially anticipated. Thus, while discoveries trigger changes, employment levels tend to decline dramatically when infrastructure construction is complete. These problems are compounded by the expropriation of arable land for resource extraction activity and environmental damage, which promote a shift away from subsistence agriculture especially when the small available male workforce abandons food production to go and get employed in oil fields (Pourtier 1989).The resulting employment, income and food instability stresses the local economy.
The promise of new jobs that new oil exploitation seems to offer typically attracts large numbers of migrants to an exploitation area. The rapid influx of people and the higher relative salaries of oil project workers inflate the local prices of key goods and services, bringing about a significant increase in the cost of living (sometimes up to 300 percent), even for those who do not share in the benefits of the oil project. The exodus often leads to rural crises of desertification as well as urban crises of large concentrations of rural poor with no urban employment opportunities (Karl, 2007 January).
The social fabric of oil localities also changes due to migration as disparities in income emerge and increase in prostitution, HIV/AIDS infection rates and crime also escalate. After the construction phase has been completed and the initial oil boom begins to decline, the original residents who may not have been able to share in oil benefits increasingly clash with ‘newcomers’ as they see their own ways of life greatly disrupted. Resource wars that are secessionist in nature are likely to occur especially during bust cycles when economic opportunities dry up. They may be triggered by longstanding grievances over land expropriation, environmental damage, corruption, or earlier mal-distribution of resources that adversely disadvantage the local communities while all the benefits accrue to non-locals or to the nation. Oil resources are also associated with civil wars that last long durations. Wars are expensive to pursue, and both governments and rebels can use oil rents to finance their armies (Karl, 2007 January; Magrin & Vliet, undated).
The string of discoveries in Kenya’s coastal areas is reigniting historical separatist agitation by the Mombasa Republican Council (MRC) that is demanding a review of the historical agreement binding the coastal region to the central government (Control Risks, undated). The prospect of missing out on a share of lucrative exploration contracts with foreign companies is a major reason for these protests.
4. The oil will help forge new types of economic partnerships that further enhance growth and development
While Africa’s natural resources are attracting new economic partnerships, these agreements may not necessarily lead to growth and development. Exploitation of oil requires more and more sophisticated technologies that are accessible to only a small number of foreign players. The strong competition between oil companies from America, Europe and emerging Asian countries like China and Malaysia to secure access to African oil fields leads to secrecy and non-transparency. The extraction of oil therefore remains in the hands of a small number of large foreign companies and a small group of the rulling elite. This explains why very little information is available about the amount of resources generated (Soares de Oliveira, 2007).
Soares de Oliveira (2007) also asserts that revenues coming from oil exploitation are often siphoned off as a result of non-transparency. This is compounded by the structure of the now widely applied variant of production sharing contracts, the principle of which is first and foremost to reimburse the oil company’s input costs (Shaxson 2005). Squandering oil profits through ostentatious consumption and other types of unproductive spending like military, further cements the unproductive system of the oil economy thus jeopardizing development.
5. The assumption that oil will continue to be the main source of global energy in the future
The world’s population growth will certainly increase the demand for energy hence the increase in demand for oil. However, the coming cycles may certainly not be as simple as imagined. A drop in global demand could occur due to an international economic crisis tied to the increase in energy prices thus accelerating developments in alternative energies that are more reliable, affordable and less volatile. Under such circumstances, oil would be buried as a main source of energy in its own grave.
In projecting the share of oil reserves, it is apparent that oil reserves in non-Middle East countries are being depleted more rapidly than those of Middle East producers. It is projected that by 2020, 83% of global oil reserves will be controlled by Middle Eastern regimes as illustrated in figure 2, particularly Saudi Arabia (25%), Iraq (11%), Iran (8%), UAE (9%) and Kuwait (9%). The dependence on oil from one supplier puts in place an international system that is not sustainable due to the fact that a handful of Middle East suppliers would regain the influence they had in the 1970s and once again be able to dictate the terms on world oil markets and manipulate oil prices and world politics. For national security purposes, this would necessitate a revolutionary change that would lead us all away from depending on a diminishing resource and find more sustainable alternatives.
Figure 2: share of global oil reserves
Source: Based on projection of 2002 production levels, BP Statistical Review of World Energy
6. That oil excavation will not have any environmental consequences
According to Karl (2007, January), localities where oil is actually located over time tend to suffer from lower economic growth and lower per capita incomes than the rest of the country, greater dislocations as well as higher environmental and health hazards.
The environmental dimension of oil exploration is a chief cause of social dislocation. Hazardous wastes, site contamination, and the lack of sufficient protection of surface and subsurface waters, biodiversity and air quality (both in the immediate vicinity of the oil project and in relation to global concerns such as ozone depleting substances and greenhouse gases) have endangered the health of local populations near oil installations and pipelines and destroyed local livelihoods such as farming and fishing. Local communities, for example, report a sharp rise in infantile leukemia near oil facilities.
There would be need to integrate the petro-dollars into other revenue sources like agriculture, service and manufacturing sectors in order to diversify the economy. This is less problematic as it reduces economic and political effects of oil price fluctuations.
The reduction of existing asymmetries between oil companies, the states, and civil society are critical. The central issue of transparency cannot be gainsaid.
The need for extensive capacity building to provide the skills that will be required for driving the oil industry forward (2013 Africa energy year book) is critical in reducing foreign domination in the industry and enhancing opportunities for local labour.
The creation of policies that ensure local involvement in decision making as well as the mutual benefit of these resources between the local people and the national government will be the domestic glue.
Without the implementation of reforms, the consequences of oil dependence will continue to be adverse.
Katindi Sivi Njonjo
Guest Editor
Katindi Sivi Njonjo, a futurist with joy and passion for foresight
Designation: Programme Director (Kenya)
Organization: Society for International Development – East Africa
Read more about the author and her view on being a futurist.
Control Risks. (undated). A New Frontier: Oil and Gas in East Africa. http://www.controlrisks.com/Oversized%20assets/east_africa_whitepaper_LR_web.pdf (Accessed 31st July 2013)
Development Initiatives [DI]. (2012, July 3). A 4-Point Policy message to East Africa on the discovery of oil and gas in the region. http://www.devinit.org/wp-content/uploads/A-4-Point-Policy-Messge-to-East-Africa-on-the-discovery-of-oil-and-gas.pdf (Accessed 31st July 2013)
Karl, T. L. (1997). The paradox of plenty: Oil booms and petrostates. Berkeley, CA: University of California Press.
Karl, T.L. (2004). Oil-Led Development: Social, Political and Economic Consequences. Encyclopedia of Energy 4: 661-667. http://politicalscience.stanford.edu/sites/default/files/documents/KarlEoE.pdf (accessed 31st July 2013)
Magrin G. and Vliet G.V. (Undated). ‘The Use of Oil Revenues in Africa’. http://www.ifri.org/files/Energie/MAGRIN.pdf (accessed 31st July 2013)
McKinsey Global Institute [MGI]. (2010, June). Lions on the move: The Progress and potential of African Economies. http://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCsQFjAA&url=http%3A%2F%2Fwww.mckinsey.com%2F~%2Fmedia%2FMcKinsey%2Fdotcom%2FInsights%2520and%2520pubs%2FMGI%2FResearch%2FProductivity%2520Competitiveness%2520and%2520Growth%2FLions%2520on%2520the%2520move%2520The%2520progress%2520of%2520African%2520economies%2FMGI_Lions_on_the_move_african_economies_Exec_Summary.ashx&ei=FE75UZPBCImXhQejnoC4BQ&usg=AFQjCNEny4vMjnV3KIs93D0MIF5994PvEw&sig2=_1_9j_JlBe7-w7TPadrG7g&bvm=bv.49967636,d.ZWU (accessed 31st July 2013)
Pourtier, R. (1989). Le Gabon 2: Etat et développement. Paris: L’Harmattan.
Sala-i-Martin, X. and A. Subramania. 2003. Addressing the natural resource curse: An illustration from Nigeria. IMF Working Paper No. 139. Washington, DC: IMF. http://www.imf.org/external/pubs/ft/wp/2003/wp03139.pdf (accessed 31st July 2013)
Shaxson, N. (2004). The Elf trial: Political corruption in the oil industry. In Transparency International, ed., Global Corruption Report 2004, 67–71. London: Pluto Press
Soares de Oliveira, R. (2007). Oil and politics in the Gulf of Guinea. New York: Columbia University Press.
United States Geological Survey [USGS]. (2012). Mineral Commodity Summaries 2012. http://minerals.usgs.gov/minerals/pubs/mcs/2012/mcs2012.pdf (accessed 31st July 2013)
http://www.
Last Updated on Thursday, 01 August 2013 11:49
Katindi Njonjo shares her reflections on African considerations following the Futures Forum on Post-Oil Economy held in Baku, Azerbaijan (June 2013).
Strong symbolism is attached to oil since this raw material was the foundation of economic systems in the 20th century and continues to be the fuel of global industrialization in the 21st. It is a key to the hierarchy that exists between countries from the richest to the least advanced. An oil based economy also involves incomparable sums of money (Magrin & Vliet, undated). That is perhaps why recent discoveries of commercially viable deposits of oil in the East African region and ‘the probability of the region becoming a global player in oil production’ (United States Geological Survey [USGS], 2012) has caused a lot of excitement.
It is envisaged that this ‘black gold’ could eradicate chronic poverty due to a likely increase in exports that results in additional revenue to finance poverty alleviation (DI, 2012 July 3). It could also enhance economic growth and the creation of jobs, enable the transfer of technology, improve infrastructure and encourage the flourishing of other related industries (Karl, 2007 January). After all, Africa’s oil exporting countries, although have the least diversified economies, have among the continents highest GDP per capita (MGI, 2010 June) as illustrated in figure 1.
Figure 1: Africa’s Diverse Growth Paths
Source: McKinsey Global Institute [MGI], 2010 June
For Kenya, it is envisaged that oil discovery will contribute towards the transformation of Kenya into a middle income country by 2030. According to an interview with Sumayya Athmani, Chief Executive Officer, National Oil Corporation of Kenya - featured by the 2013 Africa Energy Yearbook, petroleum is the single largest import by Kenya, accounting for 21% of the country’s total imports. Own production will certainly help in management of the balance of payments and stemming loss of foreign exchange. A commercial discovery would also spur a whole new economic sector and industrial development. An East African regional partnership for infrastructure development is also anticipated with South Sudan and Somali also having shown interest. There is already in place a regional refinery development plan of a gas pipeline from Tanzania to serve countries in the region. The Lamu Port and South Sudan Ethiopia Transport (LAPSSET) Corridor project which is being championed by Kenya is also aimed at regionally integrating petroleum and transport infrastructure. With the biggest obstacle being old and inadequate infrastructure hence significant bottlenecks in the effective distribution of petroleum in Kenya, the projects aim at positioning Kenya as the ultimate global petroleum logistics hub in the region.
While some countries rich in oil resources like Malaysia and Indonesia were able to improve economic performance, the experience of almost all other oil-exporting countries to date illustrates few of these benefits. According to Karl (2007, January: 2), ‘the consequences of oil-led development tend to be negative, including slower than expected growth, barriers to economic diversification, poor social welfare performance, and high levels of poverty, inequality and unemployment. Furthermore, countries dependent on oil as their major resource for development are characterized by exceptionally poor governance and high corruption, a culture of rent-seeking, often devastating economic, health and environmental consequences at the local level, and high incidences of conflict and war. In sum, countries that depend on oil for their livelihood eventually become among the most economically troubled, the most authoritarian, and the most conflict-ridden in the world’.
The challenges are certainly not due to the existence of the resource per se but due to the structures and incentives that oil dependence creates. For this reason, it is worth examining some of the assumptions pre-oil economies like Kenya make when they discover such resources. This is important for purposes of averting the proverbial ‘paradox of plenty’ or the ‘resource curse’ so that this ‘black gold’ once exploited, can be benefitial to the country.
The Assumptions
1. Accelerated economic growth will occur due to the oil findsKenya is categorized as a transitional economy whose GDP per capita is lower than the oil led or the diversified economies (see figure 1), but the economy is growing rapidly. Given that by the year 2020, the world oil consumption will rise by about 60% and transportation will be the fastest growing oil-consuming sector, there is rising global demand for oil. Expanding resource exports through oil is therefore an opportunity to ‘turbo-charge’ growth (MGI, 2010, June). However various factors can reverse that opportunity.
Oil exporting countries face the macroeconomic instability that is linked to fluctuations in the global price of oil (Magrin & Vliet, undated). According to Karl (2007, January), the price volatility of oil is usually twice that of international primary commodities. As a result, oil economies are likely to face more frequent economic shocks and are thus susceptible to acute boom-bust cycles. Thus despite significant rises in per capita income, over the past several decades, all oil-dependent countries have seen the living standards of their populations drop, and sometimes drop very dramatically from the initial levels.
During the oil boom, windfall gains provoke a type of “feeding frenzy”. Budgets are based on optimistic projections and therefore the over investment and over spending creates vulnerability to commodity prices. When the never anticipated reversal of circumstances occurs due to the price volatility of petroleum, major economic tensions are created as government finds it difficult to moderate spending (Karl 2007, January). According to Soares de Oliveira (2007), oil states tend to be heavily indebted because they use their oil resources as guarantees during periods of busts. The funds from loans frequently land in private hands while the problem of debt repayment is left to the public thus affecting economic performance.
The loss of fiscal control measured by overspending and soaring debt are among the ingredients that cause unstable macro-economic environments.
2. There will be political will to ensure mutual benefit for all
According to Sala-i-Martin and Subramanian (2003), oil more than any other resource destabilizes institutions and absolutely corrupts. In fact the Corruption Perceptions Index (CPI) created by Transparency International each year ranks the oil states of the Gulf of Guinea among the ten worst. Because windfall gains that arise from petroleum encourage rent-seeking behavior, the state becomes a type of ‘honey pot’ in which competing interests try to capture a significant portion of resource rents by capturing portions of the state. A vicious cycle results in which all actors try to gain parts of the bureaucracy while governments, in turn, reward their supporters by funneling favors their way. This greater spending on patronage, in turn, weakens existing pressures for representation and accountability (Karl, 2007 January).
Karl further asserts that rulers often support policies that produce personalized rents even if these policies result in lower overall social welfare and because they need to share these rents with supporters and subordinates, the level of distortion can be very great. Officials tend to finance mega projects in which payoffs can be more easily hidden and the collection of bribes is easier like infrastructure and defense projects. Oil wealth also creates a class of rulling elite that consolidates power to benefit this small group of individuals. It is therefore not surprising that oil resources are closely associated with military spending and the creation of extensive repressive apparatuses. This is in part due to the fact that the rulling class are wary of letting oil reserves fall out of the control of their allies and into the hands of possible opposition groups.
Natural resources like oil will therefore have a negative impact on both economic growth and income levels of the population if governance institutions are weak.
3. The existence of oil and the internal social and demographic trends will help spur growth
According to McKinsey Global Institute (MGI, 2010 June), Africa’s long term growth will be lifted by the growing labour force, urbanization and a rise in middleclass consumers. With provision of education and skills, this large workforce could account for a significant share of production and consumption.
However, according to Karl (2007, January) most jobs created by the petroleum industry are temporary or seasonal in nature, and because the growth in jobs generally occurs only during the exploration phase as land needs to be cleared, equipment transported, roads, pipelines and other infrastructure constructed, the industry actually offers comparatively few jobs over time than initially anticipated. Thus, while discoveries trigger changes, employment levels tend to decline dramatically when infrastructure construction is complete. These problems are compounded by the expropriation of arable land for resource extraction activity and environmental damage, which promote a shift away from subsistence agriculture especially when the small available male workforce abandons food production to go and get employed in oil fields (Pourtier 1989).The resulting employment, income and food instability stresses the local economy.
The promise of new jobs that new oil exploitation seems to offer typically attracts large numbers of migrants to an exploitation area. The rapid influx of people and the higher relative salaries of oil project workers inflate the local prices of key goods and services, bringing about a significant increase in the cost of living (sometimes up to 300 percent), even for those who do not share in the benefits of the oil project. The exodus often leads to rural crises of desertification as well as urban crises of large concentrations of rural poor with no urban employment opportunities (Karl, 2007 January).
The social fabric of oil localities also changes due to migration as disparities in income emerge and increase in prostitution, HIV/AIDS infection rates and crime also escalate. After the construction phase has been completed and the initial oil boom begins to decline, the original residents who may not have been able to share in oil benefits increasingly clash with ‘newcomers’ as they see their own ways of life greatly disrupted. Resource wars that are secessionist in nature are likely to occur especially during bust cycles when economic opportunities dry up. They may be triggered by longstanding grievances over land expropriation, environmental damage, corruption, or earlier mal-distribution of resources that adversely disadvantage the local communities while all the benefits accrue to non-locals or to the nation. Oil resources are also associated with civil wars that last long durations. Wars are expensive to pursue, and both governments and rebels can use oil rents to finance their armies (Karl, 2007 January; Magrin & Vliet, undated).
The string of discoveries in Kenya’s coastal areas is reigniting historical separatist agitation by the Mombasa Republican Council (MRC) that is demanding a review of the historical agreement binding the coastal region to the central government (Control Risks, undated). The prospect of missing out on a share of lucrative exploration contracts with foreign companies is a major reason for these protests.
4. The oil will help forge new types of economic partnerships that further enhance growth and development
While Africa’s natural resources are attracting new economic partnerships, these agreements may not necessarily lead to growth and development. Exploitation of oil requires more and more sophisticated technologies that are accessible to only a small number of foreign players. The strong competition between oil companies from America, Europe and emerging Asian countries like China and Malaysia to secure access to African oil fields leads to secrecy and non-transparency. The extraction of oil therefore remains in the hands of a small number of large foreign companies and a small group of the rulling elite. This explains why very little information is available about the amount of resources generated (Soares de Oliveira, 2007).
Soares de Oliveira (2007) also asserts that revenues coming from oil exploitation are often siphoned off as a result of non-transparency. This is compounded by the structure of the now widely applied variant of production sharing contracts, the principle of which is first and foremost to reimburse the oil company’s input costs (Shaxson 2005). Squandering oil profits through ostentatious consumption and other types of unproductive spending like military, further cements the unproductive system of the oil economy thus jeopardizing development.
5. The assumption that oil will continue to be the main source of global energy in the future
The world’s population growth will certainly increase the demand for energy hence the increase in demand for oil. However, the coming cycles may certainly not be as simple as imagined. A drop in global demand could occur due to an international economic crisis tied to the increase in energy prices thus accelerating developments in alternative energies that are more reliable, affordable and less volatile. Under such circumstances, oil would be buried as a main source of energy in its own grave.
In projecting the share of oil reserves, it is apparent that oil reserves in non-Middle East countries are being depleted more rapidly than those of Middle East producers. It is projected that by 2020, 83% of global oil reserves will be controlled by Middle Eastern regimes as illustrated in figure 2, particularly Saudi Arabia (25%), Iraq (11%), Iran (8%), UAE (9%) and Kuwait (9%). The dependence on oil from one supplier puts in place an international system that is not sustainable due to the fact that a handful of Middle East suppliers would regain the influence they had in the 1970s and once again be able to dictate the terms on world oil markets and manipulate oil prices and world politics. For national security purposes, this would necessitate a revolutionary change that would lead us all away from depending on a diminishing resource and find more sustainable alternatives.
Figure 2: share of global oil reserves
Source: Based on projection of 2002 production levels, BP Statistical Review of World Energy
6. That oil excavation will not have any environmental consequences
According to Karl (2007, January), localities where oil is actually located over time tend to suffer from lower economic growth and lower per capita incomes than the rest of the country, greater dislocations as well as higher environmental and health hazards.
The environmental dimension of oil exploration is a chief cause of social dislocation. Hazardous wastes, site contamination, and the lack of sufficient protection of surface and subsurface waters, biodiversity and air quality (both in the immediate vicinity of the oil project and in relation to global concerns such as ozone depleting substances and greenhouse gases) have endangered the health of local populations near oil installations and pipelines and destroyed local livelihoods such as farming and fishing. Local communities, for example, report a sharp rise in infantile leukemia near oil facilities.
Conclusion
For Kenya not to repeat the mistakes earlier made by others, it must put in place pre-requisite measures that would enable it to escape the ‘profit-redistribution-consumption structure’ and embrace a ‘profit-investment-structure’ (Pourtier 2005).There would be need to integrate the petro-dollars into other revenue sources like agriculture, service and manufacturing sectors in order to diversify the economy. This is less problematic as it reduces economic and political effects of oil price fluctuations.
The reduction of existing asymmetries between oil companies, the states, and civil society are critical. The central issue of transparency cannot be gainsaid.
The need for extensive capacity building to provide the skills that will be required for driving the oil industry forward (2013 Africa energy year book) is critical in reducing foreign domination in the industry and enhancing opportunities for local labour.
The creation of policies that ensure local involvement in decision making as well as the mutual benefit of these resources between the local people and the national government will be the domestic glue.
Without the implementation of reforms, the consequences of oil dependence will continue to be adverse.
Katindi Sivi Njonjo
Guest Editor
Katindi Sivi Njonjo, a futurist with joy and passion for foresight
Designation: Programme Director (Kenya)
Organization: Society for International Development – East Africa
Read more about the author and her view on being a futurist.
References
Africa Energy Yearbook. (2013). The Africa Energy Yearbook Interview. http://africa-energy-forum.com/webfm_send/200 (Accessed 31st July 2013)Control Risks. (undated). A New Frontier: Oil and Gas in East Africa. http://www.controlrisks.com/Oversized%20assets/east_africa_whitepaper_LR_web.pdf (Accessed 31st July 2013)
Development Initiatives [DI]. (2012, July 3). A 4-Point Policy message to East Africa on the discovery of oil and gas in the region. http://www.devinit.org/wp-content/uploads/A-4-Point-Policy-Messge-to-East-Africa-on-the-discovery-of-oil-and-gas.pdf (Accessed 31st July 2013)
Karl, T. L. (1997). The paradox of plenty: Oil booms and petrostates. Berkeley, CA: University of California Press.
Karl, T.L. (2004). Oil-Led Development: Social, Political and Economic Consequences. Encyclopedia of Energy 4: 661-667. http://politicalscience.stanford.edu/sites/default/files/documents/KarlEoE.pdf (accessed 31st July 2013)
Magrin G. and Vliet G.V. (Undated). ‘The Use of Oil Revenues in Africa’. http://www.ifri.org/files/Energie/MAGRIN.pdf (accessed 31st July 2013)
McKinsey Global Institute [MGI]. (2010, June). Lions on the move: The Progress and potential of African Economies. http://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCsQFjAA&url=http%3A%2F%2Fwww.mckinsey.com%2F~%2Fmedia%2FMcKinsey%2Fdotcom%2FInsights%2520and%2520pubs%2FMGI%2FResearch%2FProductivity%2520Competitiveness%2520and%2520Growth%2FLions%2520on%2520the%2520move%2520The%2520progress%2520of%2520African%2520economies%2FMGI_Lions_on_the_move_african_economies_Exec_Summary.ashx&ei=FE75UZPBCImXhQejnoC4BQ&usg=AFQjCNEny4vMjnV3KIs93D0MIF5994PvEw&sig2=_1_9j_JlBe7-w7TPadrG7g&bvm=bv.49967636,d.ZWU (accessed 31st July 2013)
Pourtier, R. (1989). Le Gabon 2: Etat et développement. Paris: L’Harmattan.
Sala-i-Martin, X. and A. Subramania. 2003. Addressing the natural resource curse: An illustration from Nigeria. IMF Working Paper No. 139. Washington, DC: IMF. http://www.imf.org/external/pubs/ft/wp/2003/wp03139.pdf (accessed 31st July 2013)
Shaxson, N. (2004). The Elf trial: Political corruption in the oil industry. In Transparency International, ed., Global Corruption Report 2004, 67–71. London: Pluto Press
Soares de Oliveira, R. (2007). Oil and politics in the Gulf of Guinea. New York: Columbia University Press.
United States Geological Survey [USGS]. (2012). Mineral Commodity Summaries 2012. http://minerals.usgs.gov/minerals/pubs/mcs/2012/mcs2012.pdf (accessed 31st July 2013)
Thursday, 11 April 2013
If you fail to plan, you plan to fail
In this rainy season, KenGen will complain of overflowing dams but a month or
so into the dry season, they will run low on water and KPLC will have to ration
electricity. Budalangi will flood every year in April but the community will wait
to lose lives or property before they can move to higher ground. Many
households will watch the rain water runoff instead of harvesting it for
consumption, only to buy water a few days later. Food will rot in Rift valley while people are dying of hunger in
Northern Kenya.
What is it that makes
intelligent human beings keep running into the same problems year in year out
and not do anything about it? Why don’t we ever prepare for eventualities in
our lives, even the most obvious ones?
The argument goes
that it is hard to spend time thinking about the future when the world around
us seems to be falling apart. In the
midst of overwhelming concerns like scarce resources, rising cost of living,
political upheaval, terrorist scares, ethnic divisions, family challenges or
joblessness, it is more burdensome than beneficial to add to the already long
list, especially speculative problems. What really matters is fixing the here-and-now,
right? KenGen can therefore plan to build more dams so that it harvests more
rain water for KPLC to provide uninterrupted electricity supply to its
customers for longer periods.
While this solution sounds logical and viable, it
is short term and irrelevant in the long term. Why do I say so?
If Kenya is to become a middle income country as
aspired by vision 2030, providing reliable and efficient power supply for all
Kenyans both for domestic and industrial use is going to be critical. With an
increasing population, a declining water table and drastically changing weather
patterns, hydro power is certainly not going to be a sustainable source of energy.
Alternative sources like solar and wind might be more strategic options in a
more globally warm environment.
Through policy interventions and incentives, mass
installations of solar panels in all new buildings and wind masts in
appropriate locations today, would be a strategic decision that would provide a
more reliable source of energy and result in reduced expenditure on this
essential commodity in the long run. Besides, KPLC definitely needs to style up!
Some competition would be good in forcing it to be a more efficient service provider.
Structured thinking about the future means putting
both the problems we face today and the solutions we might try in a larger
context. One is able to expand their understanding of the extent
of the situation and see how different issues are interconnected. As we have
seen time and again, it is all too easy for actions that seem reflexively correct
in the short term to lead to far greater crises in the long term. Thinking
constructively about the future allows us to begin to see the path we would
need to take in order to get to a better world or, at the minimum, the paths we
need to avoid in order to forestall a worsening of the situation. By thinking
about the future, we can clarify the responsibility and capacity we have to
create a tomorrow worth living in. It is the reasonable and responsible thing
to do. Ignoring the future is undermining the present.
Tuesday, 12 March 2013
Experts Fault County Funds Sharing Recipe
The Constitution of Kenya, 2010 created
a devolved system of government. The 47 county governments are responsible for
socio-economic development partly through resources allocated from the National
Government. A Commission for Revenue Allocation (CRA) was set up to come up
with a formula of how these resources would be allocated. The first formula
proposed allocations in the following manner: 60 per cent according to the
population size; 12 per cent according to poverty levels; six per cent
according to land size; and two per cent according to fiscal responsibility.
Society for International development
hosted an experts forum to interrogate this formula and determine if it would
enable counties to achieve equitable development especially in addressing the
needs of marginalized groups / regions as stipulated in clause 201; as well as
allocate the resources according to the developmental needs of counties and
factor in the economic disparities within and among counties, the need for
affirmative action and economic optimization of each county as stipulated in
clause 203.
A
summary of the proceedings of that meeting are captured in the article below
Author:
PETER NG’ETICH
Contacts:
pngetich@ke.nationmedia.com
Posted
Wednesday, May 2 2012 at 22:30 and can be accessed from http://www.nation.co.ke/News/Experts-fault-county-funds-sharing-recipe-/-/1056/1398406/-/74p96a/-/index.html
Population
experts want the formula for sharing county funds changed. The experts said the
formula which the Commission on Revenue Allocation (CRA) should use must be
based on poverty, rather than population.
Speaking
in Nairobi at a workshop organized by the Society for International Development
(SID), the experts, including University of Nairobi population scientist Dr
Alfred Agwanda, said a formula based on population will perpetuate poverty in
less endowed counties. “The lower end will not develop in tandem with the high
end like Nairobi,” Dr Agwanda said.
He
said some counties do not have an inch of tarmac road and basing the formula on
birth rate would not bring equality, which the Constitution stipulates.
SID
programmes coordinator Katindi Sivi-Njonjo said the 60 per cent allocated
according to population should be reduced to 40 per cent and the difference
redistributed to poorer end counties. “The formula should be pro-poor and funds
for poverty increased from 12 per cent to at least 25 per cent,” she said.
Another
expert, Dr Charles Karisa, said over-emphasis on the size of a county was
wrong.“Size was over-emphasized. Area as a factor in allocating resources
cannot stand alone. Inequality is the key to growth and poverty reduction,” Dr
Karisa said.
But
CRA director of legal affairs Sheila Ayieka said the formula was only a
proposal that needed approval by Parliament. Last week, CRA chairman Micah
Cheserem said money would be allocated to the 47 counties based on population (60
per cent), poverty levels (12 per cent), size (six per cent), and fiscal
responsibility (two per cent).
Thursday, 7 March 2013
Youth in East Africa: Infinite possibility or definite disaster?
Article first featured on the Foresight for Develpment website on Saturday, 02 February 2013 17:21
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The Future of Youth
Following a disputed election in 2007, Kenya experienced spontaneous violence in reaction to the election results mainly in opposition areas, organized attacks mainly in Rift Valley Province against certain ethnic groups that supported the incumbent, organised retaliatory attacks as well as opportunistic sexual and gender based violence. Findings of the Commission of Inquiry into the Post-Election Violence enumerated the growing population of poor, unemployed youth, educated and uneducated, who agree to join militias and organized gangs as part of the major root causes of the conflict. According to a youth advocacy organization, Youth Agenda, young were responsible for 7.32% of all incidents of pre-planned violence. 54.88% of those who executed the violence were youth.
It is this phenomenon and the fact that youth bulges (which are large youth cohorts relative to the adult population) are widely becoming recognized as a considerable resource for national development but also as a significant source of challenges that led Ms. Katindi, then working at the Institute of Economic Affairs-Kenya, to begin investigating youth trends in Kenya and their future implication.
This work brings out glaring concerns beyond education and unemployment - the most worrying trend being the risky sexual patterns, abuse of alcohol and drugs. However, general health and reproductive health challenges of young people do not feature in government’s top policy and budget priorities.
A further investigation of the issue in the region led to the following conclusions about the future.
Demographically, nearly all of Sub-Saharan Africa has a child rich population, majority of who are below the age of 15. Two thirds or more are young people under the age of 30, and only three to six percent of the population is above age 60. However, in light of the widespread reductions in fertility and mortality rates, women are giving birth later, to fewer children and spacing them more. As a result, there are changes occurring that will alter the current population structure. In the next two decades, it is anticipated that the 0-14 age cohort will shrink while the 15-29 age cohort will bulge.
This shift presents various opportunities. In countries where most youth and young adults (defined here as those aged 15 to 29 years) have been well educated and where their energy and ingenuity are sought by employers, such a large proportion of young people is seen as an asset. In economies where their numbers, productivity, savings and taxes support smaller subpopulations of children and elderly, they provide a “demographic dividend” to economic growth. However, these large youth populations if relatively well educated but unemployed become a social challenge and a political hazard. Young men in particular are the main perpetrators of conflict as they are frustrated in their search for status and livelihood.
First, a large youthful population will inevitably increase the regional population due to the fact that 15 to 29 year old women are at the peak of their reproductive age. In Kenya, this group is currently responsible for 60% of the 1.5 million Kenyans born every year. Due to high teenage pregnancies, one out of every four children born was not planned for (36% of girls are mothers by age 19) and therefore the reproductive decisions that young people makes will determine their lifetime fertility rates and, subsequently, rate of population growth in the region. It is projected that the region’s population will grow from 139 million to 237 million by 2030. 82 million will reside in Tanzania, 66 million in Kenya, 60 million in Uganda, 18 million in Rwanda and 11 million in Burundi.
Second, this population increase will inevitably increase the population density and without proper planning will result into overcrowding. A high population will also increase the demand for natural resources such as water and land thus aggravating food insecurity and increasing resource conflicts in the region. It also places a bigger demand on social amenities such as education, health care and sanitation infrastructure.
Third, most migrants go to cities as young adults to look for employment and other opportunities. A bulging youth will increase the rate of rural to urban migration in the region. If the development transformation necessary to support urban growth is not occurring at the same speed as the migration rate, the region will witness a faster increase of informal settlements and the challenges that come with slum dwellings.
Fourth, out of the current unemployed working age population, about 70% are under age 30. Female unemployment rate is much higher than that of their male counterparts in the region while unemployment among urban youths is much higher than that of their rural counterparts. Continued exclusion of youth from a productive role in the economy will inevitably exacerbate crime, drug abuse, vandalism and escalate the vicious cycle of poverty if no holistic approach is initiated to alter the situation. With a global financial crisis that only serves to exacerbate this already grim reality, the challenge for the region is to adequately address the increasing demand for employment in an environment where the number of youth joining the job market is faster than the jobs being created.
It is this phenomenon and the fact that youth bulges (which are large youth cohorts relative to the adult population) are widely becoming recognized as a considerable resource for national development but also as a significant source of challenges that led Ms. Katindi, then working at the Institute of Economic Affairs-Kenya, to begin investigating youth trends in Kenya and their future implication.
This work brings out glaring concerns beyond education and unemployment - the most worrying trend being the risky sexual patterns, abuse of alcohol and drugs. However, general health and reproductive health challenges of young people do not feature in government’s top policy and budget priorities.
A further investigation of the issue in the region led to the following conclusions about the future.
Demographically, nearly all of Sub-Saharan Africa has a child rich population, majority of who are below the age of 15. Two thirds or more are young people under the age of 30, and only three to six percent of the population is above age 60. However, in light of the widespread reductions in fertility and mortality rates, women are giving birth later, to fewer children and spacing them more. As a result, there are changes occurring that will alter the current population structure. In the next two decades, it is anticipated that the 0-14 age cohort will shrink while the 15-29 age cohort will bulge.
This shift presents various opportunities. In countries where most youth and young adults (defined here as those aged 15 to 29 years) have been well educated and where their energy and ingenuity are sought by employers, such a large proportion of young people is seen as an asset. In economies where their numbers, productivity, savings and taxes support smaller subpopulations of children and elderly, they provide a “demographic dividend” to economic growth. However, these large youth populations if relatively well educated but unemployed become a social challenge and a political hazard. Young men in particular are the main perpetrators of conflict as they are frustrated in their search for status and livelihood.
First, a large youthful population will inevitably increase the regional population due to the fact that 15 to 29 year old women are at the peak of their reproductive age. In Kenya, this group is currently responsible for 60% of the 1.5 million Kenyans born every year. Due to high teenage pregnancies, one out of every four children born was not planned for (36% of girls are mothers by age 19) and therefore the reproductive decisions that young people makes will determine their lifetime fertility rates and, subsequently, rate of population growth in the region. It is projected that the region’s population will grow from 139 million to 237 million by 2030. 82 million will reside in Tanzania, 66 million in Kenya, 60 million in Uganda, 18 million in Rwanda and 11 million in Burundi.
Second, this population increase will inevitably increase the population density and without proper planning will result into overcrowding. A high population will also increase the demand for natural resources such as water and land thus aggravating food insecurity and increasing resource conflicts in the region. It also places a bigger demand on social amenities such as education, health care and sanitation infrastructure.
Third, most migrants go to cities as young adults to look for employment and other opportunities. A bulging youth will increase the rate of rural to urban migration in the region. If the development transformation necessary to support urban growth is not occurring at the same speed as the migration rate, the region will witness a faster increase of informal settlements and the challenges that come with slum dwellings.
Fourth, out of the current unemployed working age population, about 70% are under age 30. Female unemployment rate is much higher than that of their male counterparts in the region while unemployment among urban youths is much higher than that of their rural counterparts. Continued exclusion of youth from a productive role in the economy will inevitably exacerbate crime, drug abuse, vandalism and escalate the vicious cycle of poverty if no holistic approach is initiated to alter the situation. With a global financial crisis that only serves to exacerbate this already grim reality, the challenge for the region is to adequately address the increasing demand for employment in an environment where the number of youth joining the job market is faster than the jobs being created.
Fifth, researches conducted on population structures point to the fact that 80% of civil conflicts occurred in countries where 60% of the population or more were under the age of thirty. In another study, demographers argued that countries with more than 40 percent of young adults (aged 15 to 29 years) in the population of adults (aged 15 and older) were typically in the early or middle phases of the demographic transition. These countries are 2.3 times likely to experience an outbreak of civil conflict than countries with smaller proportions. East Africa’s youth are currently about 51.63% of the total adult population. The risk of civil conflict is further aggravated when these large youth cohorts are relatively well educated but unemployed in areas that generally have low levels of development.
Primary Gross Enrolment Rates in the region are currently at 123.6% while secondary schools Gross Enrolment Rates are at 29.6%. This figure though indicative of low transition rates from primary to secondary schools, also shows the mass production of young men and women who have acquired only minimal skills along the way and therefore cannot meaningfully participate in a work environment that requires high skilled individuals and is globalizing.Sixth, studies also show that 90% of countries with very young population structures had autocratic or weakly democratic governments at the end of the 20th century. As a result, their young people tend to perpetuate cycles of political instability, ethnic wars, revolutions, and anti-regime activities. Low political will and inadequate resources to effectively integrate them into meaningfully participate in decision making also makes them feel excluded thus exhibiting open aggression and conflict through self organization or by being exploited and manipulated mostly by politicians.
Seventh, many of the countries with young and youthful populations also have among the world’s weakest economies. They also have political and institutional constraints that discourage economic activities and private investments needed to generate jobs. Lack of jobs among young people escalates dependency. According to research these countries experienced an average annual economic growth rate of 3.6 percent. This growth can increase if young people are economically empowered to allow greater personal savings and investments. However, continued denial of economic opportunities to them will lead to a shrinking per capita income. Unemployment eventually leads to frustrations that trigger political instability, making it even more difficult for poor countries with large youth populations to generate economic growth and encourage the foreign and domestic investment needed to generate new jobs.
United Nations forecasts that the plight of young people is likely to be one of the main challenges of the century. Owing to the fact that Sub-Saharan Africa will experience a bulging youth population in the next two decades, understanding the region’s population growth, structure and distribution will provide incites that help minimize the challenges of a growing youth population and maximize on the opportunities that youth bulges present.
Katindi Sivi Njonjo
Guest Editor
Katindi Sivi Njonjo, a futurist with joy and passion for foresight
Designation: Programme Director
Organization:Society for International Development
Foresight for Development: Featuring an African Futurist
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Katindi Sivi Njonjo, a futurist with joy and passion for foresightI first met Katindi for lunch in 2010 on a visit from California. I had just left my job at Institute for the Future and was preparing to go to graduate school in New York. I was so excited to meet her, to get some first-hand knowledge of foresight in Kenya. At the time I was a bit nervous; what should I expect? To my delight, Katindi was forever laughing and humble about all that she has achieved. I quickly knew that come 2011, when I have my summer break, I must find a way to return to Kenya and work with Katindi. And so I did.
I have discovered the more I learn about all the amazing work she has done in Kenya, the more humble she becomes. It is easy to see the joy and passion she finds in her work, and become enamored with the process through her eyes. I am happy to have had to opportunity to interview Katindi for Foresight for Development.
Katindi's motto, if she hasn’t already made one, might be that effective scenarios need souls, and they find them through conviction in the process.
Inspired and inspiring
Having worked in research and policy for some time, Katindi finds her inspiration to continue working to change the way Kenyans see their world in the shortcomings of her country’s policies. "I find that the Kenyan government is mostly caught up in romanticizing about the past and over-analyzing the present making us completely unprepared for any eventualities even the most obvious. The programmes and processes we institute are therefore reactive, and we have been very poor in putting together winning strategies that result into proactive solutions." This is where scenario building and futures thinking comes in.
Describing her work as a futurist is always tricky, but Katindi uses "methods such as vision thinking, strategic planning and scenarios building to guide research, discuss strategic policy issues and possible futures we may have to face whether we like it or not."
When asked to elaborate a bit more on what these terms mean Katindi tells us that "visions thinking is about having a mental picture of where you want to go within a certain period of time. We, for example, used this method to challenge the Kenyan government about the inefficiencies of five-year term plans through a process we called 'Vision 2027', which we believe influenced the crafting of the current country strategy 'Vision 2030'.
"Strategic planning, a management tool, was adopted for community development. We help constituencies chat out their development plan, map out all their resources and identify benchmarks with which to evaluate their progress. This process is promoting citizen participation and accountability of public funds."
And further, "scenarios building is a systematic way of thinking about possible futures that could happen looking at how different variables interact. The idea is to spur strategic debate on complex issues or get direction in very uncertain times. We have used this methodology to discuss the possible future of Kenya after the retirement of a dictator, and are currently discussing the possible future for Kenya given the looming youth bulge."
Katindi continues: "In most cases, I actually combine all three methodologies when facilitating, depending on the context so as to benefit from the strengths of the three methodologies."
"A long way to go with futures thinking"
Africa, as a whole, still has a long way to go with futures thinking, in particular when it comes to adopting scenarios building.
"In my view, visioning is the most common among African governments, and strategic planning is very popular with the private sector. However, not many have embraced scenarios building as a strategic way of thinking about the complex issues that African governments have to contend with. I must say though that there is scenarios work going on in South Africa, Nigeria, Kenya, Tanzania and Uganda."
Katindi says that seeds of change are in place, but a critical mass is still lacking. Which is a shame because, "the use of foresight methodologies — particularly scenarios building — would help deepen research and inform proactive policies and legislation, thereby building better solutions to complex problems. African governments would also be more prepared to deal with eventualities, thus reducing the number of catastrophes. I know it would also lead to better use of resources."
More than a job
As is the case with many futurists, futures thinking chose Katindi; not the other way around.
"After University, I got an internship at the Institute of Economic Affairs to work under a scenarios project. They eventually took me on board as a full time staff member." Katindi expands: "I am glad I found myself there because I had no idea what I wanted to pursue for a career. Through the scenarios dissemination experience, I saw the credibility of futures thinking and how Kenya can confront some of its unprecedented challenges using these methodologies."
Of her qualifications, Katindi explains that she "later did some formal training at Oxford’s Said Business School. Today I head the futures programme in the organization, and I am leading a project on possible futures Kenya might face as a result of the looming youth bulge. Foresight is no longer a job - it is a calling!"
While in her early days at IEA, Katindi was guided by and inspired by three particular people: Betty Maina, former CEO of Institute of Economic Affairs who started the scenarios work in Kenya; Barbara Heinzen, who was an independent consultant for all the East African scenarios projects; and Arthur Muliro who convened the East African scenarios processes and currently works for Society of International Development. "They took risks with me and provided numerous learning opportunities," she says.
A turning point involving revolutionary methods
The experience of disseminating Kenya’s first scenarios countrywide pushed Katindi into making what has been, up to now, an eleven year career. "The conversation the process elicited convinced me that this was worth pursuing for a career. My turning point though was when three of the four stories played out accurately, seven years later. I was convinced that foresight methodologies were very revolutionary methods of discussing possible futures and inventive policy proposals." Looking ahead, Katindi explains that she "would really like to carry out extensive research and advocate for revolutionary social policies through futures methodologies in order to provide practical and creative solutions to the poor and marginalized."
For others who might want to get into the futures field within Africa, Katindi has this to say: "Western countries can afford to have foresight conversations for intellectual purposes, since most of their populations have reached the self-actualization stage of life. Africa is still dealing with very basic needs. African futurists will, therefore, have to contextualize foresight methodologies and use them to provide pragmatic solutions. Foresight work is fairly new in Africa, particularly in rural areas. There are many unexplored areas, and this provides enormous opportunities. However, foresight practitioners here will have to be patient in order to break through. This is because culture and religion may hinder effective futures thinking and practice. A classic example is a youth group I facilitated in Northern Kenya in April 2011, who said they don’t deliberately plan for their family sizes because children are a gift from God. The quality of their future is dependent on God’s will (inshallah) and God’s provision. A discussion on demographic control and its future implications, therefore, became a very difficult subject to address." Such challenges Katindi meets head on.
When asked about challenges facing African foresight, Katindi says this: "For those pursuing futures studies, it is good to have the formal knowledge of the discipline. However, foresight knowledge is acquired more from practice. Futures knowledge is imbued more by doing than from theory."
And Katindi should know. She travelled across the country, talking about Kenya’s scenarios in over 200 meetings, when she was fresh out of the university. She has a story of spending three days, in the back of a truck on a tiny bench to Moyale, in order to share the scenarios with that region. "I am just happy to have gone through the discovery process which is part of being a futurist. It is what makes you believe in the process and get the much needed conviction because if you conduct scenarios without conviction, you create empty stories, stories without a soul."
Beyond the religious aspect, then, what challenges does an African futurist face working within their continent?
According to Katindi, "Foresight methodologies, in my view, can be too abstract. In Kenya, the scenarios we first produced were largely dismissed until the post-election conflict in 2008, when people realized that three of the four scenarios had played out quite accurately. This precision made people begin to have confidence in the methodology. More private sector organizations are demanding for this type of analysis in their planning. The public sector is still slow, though it acknowledges that scenario conversations are a credible way of preparing for eventualities. I think the qualitative nature of scenarios does not resonate well with the quantitative orientation of government economists. Quantitative data collected though various modeling techniques would help back up the extrapolations made in scenarios."
Challenges for African foresight
"The other big challenge", says Katindi, "is that people expect foresight methodologies to be predictions, and they are not willing to engage with scenarios as possibilities."
For those who might want to get into the futures field within Africa, Katindi suggests a handful of foundational pieces for people just getting interested in the field and in need of some technical background. These publications are what "any futurist should be aware of", she explains:
- Pierre Wack's writings
- The art of the long view, by Peter Schwartz
- Scenarios: The art of strategic conversation, by Kees van der Heijden
- The scenarios planning handbook: Developing strategies in uncertain times, by Bill Ralston and Ian Wilson
- Breaking the mould: The role of scenarios in shaping South Africa’s future, by Nick Segal
- Thinking long-term, acting today: The art of scenarios building, by Katindi Sivi Njonjo
When asked what her office looks like, Katindi tells us we’ll see this: "Books and so many journal articles on youth and vigilantism. These are the effects of rigorous research."
And the place she does her best thinking? "If I could relocate, it would be Rockefeller’s Bellagio Center in Italy, or anywhere in Cape Town, South Africa. But in reality I think best in the shower. I sometimes get such deep brain waves at night but I never get up to write them down, so I will never remember the next morning what it was all about!"
Although others describe Katindi as "meticulous in [her] work" she tends to think she is "easy going." Personally I think she’s somehow mastered both skills!
Quick facts about Katindi
- Day job: Society for International Development – East Africa
- Role: Programme Director
- Date of birth: 6 March
- Country of birth: Kenya
- Foresight experience in Africa: Katindi has conducted foresight work in the East African region, including Kenya, Uganda and Tanzania
- Foresight qualifications: Katindi has a Certificate in Scenarios from Oxford University, Said Business School
- Facebook: Katindi's facebook page
- Linked In:Katindi's linked in page
Tessa Finlev is a research affiliate with Institute for the Future. She is also pursuing her masters degree in International Political Economy and Development from Fordham University in New York. Her current work is focusing on designing a futures thinking process to contribute to the conflict resolution and peace-building field. Tessa will be joining FFD in Pretoria in July to gain a broader perspective on how futures thinking and peace-building can work together. She will be seeking out interviews from people in the field of conflict resolution and futures thinking, writing features for the site on foresight for peace, and testing the platform as a collaboration site. For more information about her research see here.Contact Tessa in the following ways:
- Twitter: futressa
- Skype: tessafinlev
- Read Tessa's blog: Foresight for Peace; an odyssey to my future.
East Africa: Youth Can Seek Jobs in the EAC to Ease Pressure on Market
'The Youth Fact Book: InfinitePossibility or Definite Disaster', a book I authored in 2010, has been recognized as an authoritative one stop shop of youth facts, figures and analysis with regard to the state of Kenya's youth population. it was featured extensively in the article below.
Article by George Omondi
Increased
spending on training is yet to match the rate of job creation in the country, a
trend that analysts warn could have grave consequences because young people
with skills are likely to remain unemployed.
Private companies have lately been putting billion of shillings of their social responsibility budgets to support education through scholarships and buying of learning materials and equipment, thereby giving the youth access to education.
On
its part, the government has introduced free primary and subsidised secondary
education, raising the budgetary allocation to the Education Ministry to 73.8
per cent of the Sh236.6 billion spent on social sector in the last financial
year.
"This
heavy investment supply side of the labour market is likely to go to waste if
not accompanied by detailed curriculum revision to allow the youth to create
their own jobs and export surplus to other economies," said Ms Katindi
Sivi Njonjo, a policy analyst at the Institute of Economic Affairs.
The
Kenya housing and population census data released late last year indicated that
78.3 per cent of Kenya's 38.6 million people (30.2million) are aged below 35
years of age - the same category that has been hit most by unemployment.
Ms
Njonjo attributes youth unemployment to the high population growth rate of 2.8
per cent - which is above the global average of 2.1 per cent - that has
outpaced the rate at which the national wealth has been growing annually.
In
the past few years, the government has come up with entrepreneurship programmes
such as the Youth Enterprise Development Fund and Kazi Kwa Vijana programmes
but the number of unemployed youth continues to grow as thousands of young
people graduate from learning institutions every year.
"Some
of these programmes have not met expectation because they are conceived with a
mindset that views the youth as menial labourers at a time when focus has
shifted to creating knowledge economies," said Ms Njonjo.
Mr
David Nalo, permanent secretary at the East African Community Ministry, said
the government was targeting the ongoing rebuilding of the economy in Rwanda
and Burundi to provide some form of employment to Kenya's skilled and jobless
youth.
The
ministry plans to set up one-stop youth resource centres across the country to
provide information on employment and entrepreneurship opportunities arising
under each of the four pillars of regional economic integration - custom union,
common market, monetary union and political integration.
"The youth unemployment in this country is a time bomb that we have to defuse using every available opportunity and resources," said Mr Nalo, adding that the youth resource centres will raise the number of youths being absorbed in regional projects.
The
move comes hot on the heels of last month's signing of the mutual recognition
agreement in the region that now allows professional and academic bodies in the
region to recognize qualifications and standards of all member states.
This
means a professional or academic certificate issued in any of the member states
will be recognized in all the five member states, easing the job hunt across
borders.
At the regional level, Mr Nalo said, partner states have agreed to establish five centres of excellence in each of the states to develop and strengthen technical innovations by the youth in the region, in a move aimed at creating a technological competitive edge for the region.
But even as concern rises over the low growth of the demand side of the labour market, the education ministry has announced its plan to establish 15 new public university colleges across the country in the coming months.
This
move is expected to significantly increase the number of graduate job seekers
into the market.
The
recent campaign by the government seeking to allow middle-level public
institutions to offer degree programmes has already increased enrolment in
local universities to 200,000 students by end of 2010.
"We
are keen to ensure that the country's higher education is not only relevant to
local development needs but also prepares students to compete effectively in
the global knowledge-based economy." President Kibaki said last week when
he granted a charter to the Kericho-based Kenya Highlands Evangelical
University.
Ms
Eldah Onsomu, acting head of social sector division at Kenya Institute for
Public Policy and Research Analysis (Kippra) says just about 24 per cent of
Kenya's youth are in formal employment. She maintains that there is a need for
channels and preparation for youth to employ themselves.
"There
is genuine need to focus on creation of quality jobs but since the formal
sector is not expanding as fast, the government also needs to empower the youth
to create wealth in the informal sector," said Ms Onsomu.
The
officials are visiting schools, colleges and universities where they hope to
convince students who fail to get further education opportunities in Kenya to
seek even cheaper higher education in Tanzania and Uganda.
This
is in the first phase of an awareness drive initiated by the ministry.
Lobbyists
have however being pushing for radical pro-youth policies to address
unemployment in the country.
"The
government needs to adopt youth-friendly economic policies such as ensuring
each person holds one job, and is strictly required to retire at age 55, while
reserving 30 per cent of government procurement for youthful entrepreneurs, and
investing more national resources in sports, music and the arts," argues
George Nyongesa, national convener of the Youth Forum.
Rare occasions when Kenyan men are justified in beating their wives
'The Youth Fact Book: InfinitePossibility or Definite Disaster', a book I authored in 2010, has been recognized as an authoritative one stop shop of youth facts, figures and analysis with regard to the state of Kenya's youth population. It was featured extensively in the article below.
By KWAMCHETSI MAKOKHA (kwamchetsi@formandcontent.com)
Posted Friday,
November 26 2010 at 12:35 on http://www.nation.co.ke/oped/Opinion/Rare%20occasions%20when%20Kenyan%20men%20are%20justified/-/440808/1060924/-/item/1/-/15kkddkz/-/index.html
Burn
the food, refuse to have sex and neglect the children — these are some of the
surest ways for a Kenyan woman to get a beating from her husband.
Should these acts of
provocation not yield results, she can also argue with her husband or go out
without informing him, with sure-fire consequences.
As the world began
marking 16 Days of Activism on Violence against Women this week, Katindi Sivi
Njonjo of the Institute of Economic Affairs released her Youth Fact Book:
Infinite Possibility or Definite Disaster?
Secret documents
Culling data from recent
research efforts published in various credible sources, Ms Njonjo’s fact book
turns secret government documents into a public resource.
For example, the data
from the Kenya Demographic and Health Survey, 2009, reveals that many young
women between the ages of 15 and 34 believe that burning food, refusing to have
sex, getting into an argument with the man, going out without asking the man’s
permission and neglecting the children should attract a beating from the
husband.
Up to 40 per cent of
young women in this age bracket believe that the husband would be right to beat
them if they neglect their children.
Conversely, 31 per cent
of the men in this age group agree that neglecting children should attract a
beating for the wife.
Where 30.2 per cent of
the women surveyed believe that a wife should be beaten if she goes out without
telling her man, only 24 per cent of men believe it is right to raise your hand
against the spouse in such circumstances.
Refusing to have sex with
the man should attract a beating for wives, according to 21 per cent of the
women surveyed while 13.5 per cent of the men believe that withholding conjugal
rights should be a ticket to corporal contact.
Arguing with the man
should provoke a beating, according to 24 per cent of the men surveyed against
30 per cent of the women.
Women take burning food
more seriously than men, with 13 per cent expecting it to lead to a beating
against 8 per cent among men.
Not all women in Kenya
have an equal chance of getting a beating from their husbands, however.
Education and wealth reduce the expectation of wife beating in men and women.
Women who hold a salaried
job are less likely to support wife beating than those who are unemployed or
work in underpaid enterprises.
Urban men and women are
less likely to advocate wife beating than their rural counterparts. Nairobi has
the lowest number of women expecting to be beaten, at just 10 per cent.
There is, apparently, also
a shortage of men willing to beat their wives in Nairobi, and those who look
upon it as a fitting cultural practice believe it should only apply when
children are neglected with 20 per cent support among women and 25 per cent
among men.
Even so, women in Nairobi
think it is not a big deal to burn food, with just 2.7 per cent thinking bad
cooking should result in a beating against 5.5 per cent of the men.
Western Province is the
headquarters of wife beating, where 40 per cent women expect to be beaten.
There is a deficit of wife beaters there, though, with just 20.6 per cent for
the men ready and willing to beat their wives.
In Rift Valley Province,
36 per cent of the women expect a hiding from the hubby, and the men are not
unwilling, at 22 per cent.
In these two regions, the
egregious offences in ranking order are neglecting children, arguing, going out
without informing the man, refusing to have sex and burning food. In Central
Province, interest in wife beating is middling, with expectations among women
at 18 per cent and 20 per cent among men, but both genders agree that
neglecting children is a grave offence.
Those women who
are married or live with a man, have separated or divorced are likely to
support wife beating rather than those who have not attempted these blissful
unions.
As women have
more children, so too do their chances of getting beaten. Women who are
divorced, widowed or separated, those who have married more than once or even
been married for over 10 years are soft targets for batterers.
The actual
numbers on abused women bear out the social attitudes. Abuse figures are
highest in Nyanza Province at 37 per cent, followed by Western Province at 32
per cent, Rift Valley 28 per cent, Central 26 per cent, Coast 25 per cent and
Eastern 23 per cent.
Nairobi and North
Eastern provinces have the lowest incidences of abuse at 18 per cent.
What do women do?
Perhaps have more sex, burn less food, argue less with men, put a GPRS tracker
on your left foot so hubby knows where you are, and do not — ever — neglect the
children.
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