When poverty reduction competes with state building: 

The case of South Sudan

The world’s youngest nation, South Sudan, has now had over a year of political economic autonomy, following a break away from Sudan in July 2011. Independence was preceded by the period after the signing of the Comprehensive Peace Agreement in 2005, during which it operated as a semi-autonomous government. South Sudan has since made significant progress in restoration of peace, political transition, establishment of governance structures towards building a stable state. There have also been improvements in the socio-economic wellbeing of the people of South Sudan.

However, this has not been without challenges some of which could negate the progress already made. Preliminary analysis on public expenditure and resource flows reveals critical resource management challenges that could have far reaching implications on fiscal sustainability, public accountability and the economic well being of the country’s poor.

Despite significant data limitations and methodological constraints, Kenneth Okwaroh analysed the flow of domestic revenues and Official Development Assistance (ODA) in South Sudan.  He used budget estimates for the period between 2006 and 2011 as a proxy to analyse the intentions, motivations and the character of resource allocation in the country with a specific focus on resource allocations for poverty reduction. The analysis revealed the following:

Acute dependance on oil revenues 

I – The Government of South Sudan (GoSS) acutely depends on oil revenues for its income. Between 2006 and 2011, oil revenues contributed over 98% of state income. This poses a risk to fiscal sustainability especially because the country’s oil production is projected to decrease by 10% by 2019, and by 50% by 2029 if no new reserves are discovered. This lack of diversity in the economy, together with increasing dependence on imports, increases the country’s vulnerability to fiscal turmoil in the face of external shocks. A classic example is the decision to shut down oil production in response to the dispute with Khartoum that lead to unprecedented inflation rates (80% in May 2012) and profoundly stifled growth. Besides undermining sound -economic management such dependence on oil revenue also impedes effective taxation with significant implications for governance and accountability.

Competing resource demands - Poverty missing out

II – Since the signing of the CPA in 2005, the country has experienced considerable growth in state revenues and ODA flows. However this has not been translated into significant progress in human development, poverty reduction and economic growth. Compared to other states in the East African region, South Sudan has the lowest life expectancy at birth (42 years), lowest adult literacy levels (27%), highest maternal mortality rate (2,054 per 100,000 live births) and one of the highest poverty headcounts (51%). Given these high poverty and welfare indicators, and the direction of government expenditure, it is deducible that, key priority areas for budget allocation are not efficiently and effectively aligned poverty reduction outcomes.

III – South Sudan could be struggling with mechanisms for balancing resource demands for state building with the urgent need to address poverty and human development. Despite government revenues and expenditure steadily expanding, pro-poor sectors such as agriculture, health and education, have been considerably under-funded. For example while state revenues expanded by 17.2% between 2008 and 2012, total expenditure on agriculture, education and health as a proportion of total spending grew by only 11.7%. These three sectors, which were identified as expenditure priorities, collectively received 12.5% of total average spending, compared with security, which received 28.2%. Conversely, public administration and justice, law and order, which were not considered priority sectors, reported higher outturns (11.5% and 11.4% respectively). Moreover expenditure in all three sectors fell short of international standards and targets set by peer states.

Prioritization far from actual spending

IV – There are significant gaps in the alignment of resources with identified expenditure priorities. Both budget allocations and donor commitments are not adequately synchronised with these priorities. For example, the education and health sectors, which the GoSS outlined as priority expenditure areas, received lower proportions of total spending (6.9% and 4.2% respectively) than public administration (11.5%) and rule of law (11.4%), which were not identified as priority sectors.

Okwaroh argues that the findings depict a largely unstable macro-economic environment that least guarantees fiscal sustainability, steady public revenues and predictable public spending. There is compelling evidence that abundant oil revenues in South Sudan coupled with aid could be impinging on effective domestic tax collection. With a small underdeveloped and less diversified formal economy, low capacity government institutions and inefficient tax collection, it risks becoming an import-dependent country afflicted with the ’resource curse’.  Fluctuating GDP growth and instability in the oil industry add to the fragility of a conflict-ridden state, faced with multiple resource demands for reconstruction, state building and poverty reduction. South Sudan must therefore streamline its management of oil and explore alternative, non-oil resource streams – such as agriculture – to ensure fiscal sustainability. It must institute mechanisms to ensure effective balancing of resource demands for state building with funding for poverty response. 

You can find the full report here:  and the data and analyses here: 

What shall we eat? - Return Smart Sweet Sorghum!

Yesterday I attended a round table on food security with the theme – ‘What shall we eat?’ This was facilitated by the East African on the sides of the launch of Kenya’s 3^rd Agriculture Sector Development strategy graced by very important people – Government ministers and big private sector names. Folks went on and on with fancy stuff about eradicating subsistence agriculture and replacing it with Agribusiness to address food deficits in the country. I had a million questions to ask – poor thing the moderator could not spot my short self. So on my way back home, pretty distraught, stuck in Nairobi traffic I wondered why these guys were so out of touch with reality. However one thought kept bugging me. It was the thought of this crop that supplies food, fodder and fiber;  thrives in erratic climatic conditions, has the capacity to provide steady income to poor rural subsistence farmers, and can be harnessed to produce commercial alcohol and safe bio-fuels. I pictured this era of droughts, famines, unemployment, perennial food insecurity and saw policy makers racing to grab this crop. I saw ordinary poor people staring at the spectre of death from hunger actively investing in this crop even without government intervention, just for the sheer theoretical sense that it made. Yet this was just but a figment of fiction in my imagination. In reality this crop is SORGHUM.  Despite overwhelming evidence, it has not seen commensurate investment in its production, consumption and commercial utilization as compared to other peer cereal crops. So today I decided to tell a story - a SORGHUM story!

Anthropological evidence traces sorghum back to 8000BC Africa around western Ethiopia and Chad. It later spread to India, the Middle East and further to the Far East by around 400AD and only arrived in America (today the largest producer) in 1800s. Sorghum was then widely cultivated and consumed as a staple food; utilized in brewing beer, making bread and porridge. Domestically, it was used as fuel, thatch, fencing, housing construction and largely as fodder. Sorghum was a wonder crop; a self repellent to predatory birds, with high nutritional value and high net energy balance. It was a critical diet accessible and known to poor subsistence farmers in semi arid tropics for its resilience and ability to survive erratic weather conditions - (Sorghum matures in only 4 months and requiring just about 4000m³ per hectare - compared to corn that requires 8000m³).  

   

The corn-ish take over:

Well that was until the 1500AD ‘Colombian exchange’ as described by historian Alfred Crosby in reference to the epic importation of corn into Africa facilitated by the transatlantic trade. That exchange would mark the beginning of a massive cereal takeover. No one would have imagined at that point in time that corn would come to colonize the African farm, supplant historical African food grains (like sorghum and millet) and practically hold the African farmer and consumer hostage as the staple (not to do without food). It is however the dawn of commercialized production of corn that dealt the greatest blow to sorghum; suddenly the production and consumption of sorghum products that dated back many centuries stopped, beer brewed from sorghum was replaced with corn, and so was the case with porridge and bread. The reasoning then was that maize was a superior crop both nutritionally and commercially.  Today 16 out of the 23 countries in the world with the highest percentage consumption of maize are African. In Southern Africa, over 50% of total calorific consumption is drawn from corn. Besides colonizing the African plate, maize did colonize the African mind as well. In Malawi, corn is referred to as ‘Chimango cha makola’ meaning maize of the ancestors. Corn has become so entrenched and subdued other cereals to the extent that native Malawians thought it was actually a native crop passed on by their ancestors. 

Sorghum was downgraded mainly based on its palatability (the tannin in sorghum produces a less preferred bitter taste). Attitudes changed so much so that households that had for long cultivated and consumed sorghum turned to corn. Those that continued to cultivate sorghum were stigmatized and considered poor. In rural Africa, a social stratification emerged that categorized those that consumed only maize as “well to do” (at the highest level of society), those that mixed maize and sorghum flour as “middle class” and those who consumed pure sorghum or millet as “poor” households. This further entrenched the stigma against sorghum and created a production disincentive. Today sorghum occupies less than 25% of arable land across Africa, and globally it is number five among the largest cereal crops after wheat, rice, maize and barley.

Climate Change:

And then came climate change. This brought with it new realities in the battle between corn and other traditional African cereals. Alas, the reliable rainfall that corn so heavily depended on is no longer predictable. Moreover soil productivity has declined as a result of over production, poor land management and conservation practices and attendant toxicities.  The result has been a desperate lot of African farmers left with an over-hyped crop with limited resilience to prevailing weather conditions against a background of neglected and underdeveloped alternative cereal crops. Today maize production is largely fluctuating and unpredictable. This has contributed to significant deficits in food production, high food prices, hunger and desperation (especially among the chronically poor).

Take Kenya for example, government policy has focused more on maize production giving lesser attention to alternative cereals.  The production of corn is significantly higher than sorghum and millet despite its highly erratic productivity. Folks have continued to invest in it and neglected the others anyway. Research and development, capacity and infrastructure towards sorghum have continued to lag behind other crops. Little has been done to educate farmers and to provide incentives to increase its production. Limited resources have been invested in improving its production, utilization, demand and marketing.

The return of Smart Sweet Sorghum:

Nonetheless people are gradually reverting to sorghum and in the most unusual places. In the past 2 decades, the area under sorghum cultivation has expanded, in fact almost doubled though production has not increased (still at 800Kg/ha on average). In urban areas, starred hotels today serve brown chapattis, millet/sorghum ugali/pap, and sorghum porridge. In addition, medical conditions are driving people away from maize to the good old smart sorghum for its nutritional content! Sorghum has also gained commercial significance in the malt and beer brewing industry where the private sector is increasingly contracting and facilitating farmers to produce sorghum commercially as a raw-material. The Nigerian brewing industry now consumes over 152,000 metric tonnes of sorghum annually. In East Africa, alcohol and beverage companies are providing incentives and subsidies to local populations to produce sorghum which is now a substitute for molasses in ethanol production. This is largely because the extract in the stalks of sorghum and the brown midrib produce high quality ethanol which is cheaper and more sustainable – compared molasses from sugarcane. New developments have capitalized on harnessing clean bio-energy from sorghum, which if effectively produced would provide a cheaper and cleaner alternative to fossil oil fuels. Sorghum is increasingly being harnessed to produce clean bio-fuels that could effectively help reduce foreign oil import costs, reduce green house gas emissions and mitigate the effects of other fuel sources on pollution and global warming. Indeed some of the billions of dollars paid to overseas oil producers can be effectively diverted to invest in and benefit poor rural communities producing sorghum based bio-fuels.

To cut my long story short. The evidence is overwhelming. You obviously do not need to be a rocket scientist to figure out how much Africa needs this crop. The loathing of subsistence agriculture helped by such delusional policies of transforming over a whole population of sedentary subsistence farmers into Agri-businessmen and women just won’t give us food. Isn’t it time governments stepped up agricultural policy and action towards reintroducing and revamping the productivity of this crop?

Vouching for Social Protection in East Africa: 

Mainstream development bypassing the extreme and chronically poor

Economic growth and policy response has been largely unsuccessful in adequately addressing issues that affect the poorest, most marginalised and vulnerable groups in East Africa, despite it being one of the world’s fastest growing regions today. Between 2000 and 2010 the size of East Africa’s economy more than doubled in real terms, from US$32 billion to US$79 billion. If Rwanda (currently growing at an average of 7.7%), Tanzania (6.8%) and Uganda (7.2%) maintain their growth momentum and Kenya (3.7%) accelerates, it is expected that they will reach middle-income status around 2022. Over the past decade average regional growth was estimated to be as high as 6.3%. Per capita incomes were US$1,061 which means that, in theory and on average, every East African was entitled to approximately US$88 a month or US$2.97 a day (more than double the  US$1.25  a day poverty line).

Yet despite its impressive economic growth trajectory, East Africa has remained one of the world’s poorest regions. According to the World Development Indicators and the Human Development Index 73% of the region’s population was living in multidimensional poverty in 2011; 52% of people were living below US$1.25 a day; and about 44% were living below nationally-defined poverty lines. In 2011, 135 of every 1,000 East African children died before their fifth birthday; 608 of every 100,000 women died in the process of giving birth; and nearly 58.4% of all East African children suffered from stunted growth.

Despite large investments in the areas of health, education and other public goods, barriers remain that preclude the poor from effectively and adequately accessing and utilising these resources. The chronically poor are often bypassed for a number of reasons. Firstly, mainstream development programmes operate on a large scale, meaning that nuances in the depth and diversity of poverty can be overlooked. Secondly, many state-led programmes assume that income alone can lift households out of poverty. Finally, the most deprived and vulnerable groups are often either unaware of government services, programmes and resources or lack the empowerment to demand for them.

Social protection presents a strategic opportunity to ensure that economic growth policies co-opt redistribution and respond to the problems and needs of the poorest. It aims to reduce social and economic risks and vulnerabilities, empower people in extreme poverty and guarantee a minimum standard of dignity for every individual throughout their life.

There is increasing awareness of the need to include social protection as a critical part of the mix of mainstream public goods that the state is obliged to provide and maintain. The Ouagadougou Summit (2004) vouched for enhanced coverage of effective and adequate social protection programmes across the continent. Through the Livingstone Call for Action (2006) fourteen participant countries committed to recognise social protection as a basic human right and integrate it into their developmental plans. The Social Protection Floor (2009) aims to support countries to plan and implement sustainable elements of social protection systems. In East Africa, constituent states are increasing efforts to institute coherent and coordinated social protection responses. Existing social protection programmes revolve around social security, hospital insurance, pension schemes, cash transfers and social assistance programmes.

However, the depth of social protection is still limited and fragmented in East Africa, which results in duplication and inefficiencies. Current social protection instruments do not reach a large section of the population (only about 10%). At the East African Community (EAC) level, little attention has been granted to establishing an East Africa-wide policy. Neither the EAC treaty (1999) nor the Common Market Protocol (2010) recognises social protection as a right, but merely as an aspect of social welfare. None of the countries in East Africa have ratified the ILO communication No 102 on social security (minimum standards) of 1952. Even the EAC strategic plan for Gender, youth, children, social protection and community development (2011-2015) portrays social protection in a narrow sense, focused on reducing vulnerability. With the exceptions of Kenya and Rwanda, most EAC states lack formal social protection policies and legislative provisions around recognising social protection as a right are vague.

There are marked variations amongst member states around the conceptualisation of social protection and levels of commitment, which highlights the need for minimum standards and comparability across the region. Stakeholder must now converge and explore avenues through which donors, governments and non-state actors can work actively towards embedding social protection as a critical part of the mix of mainstream services that every state in East Africa is obliged to provide and maintain.

 Olympics: Far from the shiny stuff you see on telly  

When I heard Kenya’s Prime Minister declaring at the Kenya House in Stratford that the country would be bidding for Olympics 2024 – I wondered what a heavy load of folly. I wondered what deludes an African state bedevilled with corruption and inept financial management and oversight mechanisms like Kenya that they would pull off a mega event when big gunners like Canada, UK, Australia, and South Africa could not even come close to recovering their investment.

Well, for the past fortnight, the Olympic mood engulfed Great Britain. London has been awash with emotions, revellers and Olympians alike. True to the words of Mayor Boris Johnson: London went ‘Zoink’. But hang on a minute, who really were the folks sucked into this Olympic-frenzy? Who indeed were the real winners? Could there have been someone somewhere on the curbs, standing on the side-lines bypassed by the Olympo-mania? There has been some over-optimism and naivety around the hosting the Olympics and other such mega events (like the Commonwealth Games and the FIFA world cup) that needs to be honestly interrogated.    

Of late there has been the fancy reference to ‘legacy’ that every committee bidding or organizing these events are fixated to that is not only misleading but mythical as well. The justification in almost every bid today is that: i) economically the events would generate and redistribute massive financial capital. ii) Catalyse urban transformation; fast tracking regeneration and renewal of decaying segments of a city’s morphology and addressing issues of urban poverty, social exclusion and inequality. iii) Attract inward investment and tourism critical for promoting growth and creating employment, and  iv) expose a city or a country to valuable international audience strategic for building its image and enhancing its competitiveness.

However, in reality, experience from a majority of previous hosts tells a story extremely divergent from the idealism exuded by the organizers of these events. Cities/countries have incurred huge losses; there is no evidence of inward investment attributable to the image built by the games; large populations have been displaced through evictions for construction or gentrification; and there is little documented impact on the lives of local people. Media accounts of wasteful public spending have tarnished their reputation as vehicles for urban regeneration and portrayed them merely as public relations ventures far removed from the realities of urban problems. Actually the main beneficiaries are seldom the most deserving and needy candidates. They fail to address the underlying structural issues that exacerbate poverty, dereliction and decay in urban landscapes.

  

Let us interrogate these claims honestly and objectively in order to be in a position to judge the Olympics and other mega events for what they truly are:

Massive financial capital OR Massive public investment – value for money

Except for the Los Angeles Olympics of 1984 and Atlanta 1996, not one mega sporting event can claim to have made profits out of the games. The norm has been that the actual costs far outstrip the estimated costs during the bidding process. Revenues generated do not come up at least to the expectations of their organizers. The CWG at Edinburgh in 1986 apparently incurred a £4.3 million deficit; the actual cost of the Manchester Games surged to £670 million and the plan to raise revenues through advertising and tickets flopped; the initial bid for the Melbourne CW Games estimated it would cost $195 million but eventually exploded to over $1.1 billion. By 2010, the Glasgow 2014 budget had increased from £373 million submitted at the time of the bid to £523 million. 

The Montreal Olympics of 1976 earned the name – ‘The Big Owe’ drawing from the huge debt that Quebec accumulated from hosting the games. In fact the $1.5-billion debt from the 1976 Summer Games was paid off in full by Canadian tax payers 3 decades on in 2006. Athens 2004 Olympics cost a record £9.4bn way over original budget. This left Greece with huge debt amounting to about €50,000 for each Greek household to foot. Maintenance of the sites alone cost as much as £500m. The Sydney Olympics 2000 cost about $6billion costing the public at least $1.5bn (about £720m) in deficit. And true to the Olympic fashion, the London Olympics 2012 overrun the initial budget by 101% in real terms to end up at US$14.8 billion by the time of the opening ceremony on 27^th July 2012.

Clearly, the economic viability of these events need not be over-debated, truth be told, they have not demonstrated the capacity to generate surplus revenue for the host cities and nations. They have instead burdened the tax payer with extra expenses that do not match up benefits accrued from them. Without robust systems of financial control, accountability and performance management to ensure value for money and delivery on agreed outcomes, they are poised to draw money away from public sector investment that would be better spent on education, healthcare rather than sports facilities.

Reconstruction of urban form or transfer of decay

The IOC argues that as one of the legacy issues, the games facilitate development of new infrastructure to encourage economic regeneration, revitalise, remediate and regenerate deprived inner city areas and make them attractive to business and open up new opportunities for employment.

However, there is a tension between the construction of the image of prosperity and attractiveness and the actively concealed landscapes of urban poverty and deprivation. Neighbourhoods are made-over to create a shiny image for tourism and investment but the underlying structural causes of their decay not addressed. Under the logic of event-oriented development, the visibility of poverty is an eyesore; preparations often involve removing the poor from high-profile areas surrounding event venues without significant attention to long-term solutions to slum problems. There were massive displacement of over 1.5 million Chinese to construct the Birds nest in Beijing for 2008 Olympics; to beautify Seoul for 1988 Olympics, South Korea evicted residents for clearance and development of around 100 sites. In Cape Town, homeless people were moved from the downtown area around the stadium into razor wire encircled encampments outside the city for the 2010 world cup. “They want to make a good impression for the foreigners coming. We are like flies to them.” There was a row with Glaswegians in Dalmarnock over evictions and closure of a market of historical value for constructions for the Glasgow 2014 commonwealth games. The construction of the athletes' village in Stratford (London East-end) broke up a community that had been on the site legally since 1972. In sum the evictions have disrupted community and neighborhood ties, curtailed social capital and diminished locality identities for a shiny image makeover that can only conceal so much from investors and tourist eyes for so long.

Furthermore, the displacements aside, the history of mega events is that they have increased housing prices and cost of living in such neighbourhoods and technically driven out initial householders. "Olympic effect" helped to hike property prices beyond the means of many in Barcelona. According to homeless charity Shelter, across East London landlords evicted tenants to cash in on lucrative Olympics rental demand. Most events have merely transferred unemployment, poverty and deprivation to urban fringes as they bolster city competitiveness; image and physical environment. Moreover, many hosts have ended up with their overall negative aspects unaffected; despite massive expenditure in the costly facilities that remain underutilised and cost more to maintain after the games.

Addressing Social exclusion

Mega events have been touted as drivers for enhancing social inclusion. The argument has been that they would enhance human capital development and community participation – provide volunteering opportunities and apprenticeships, and create new jobs. However, though volunteering programmes can enhance personal development and confidence of those who participate, there is a weak link between volunteering and getting long-term, high quality jobs most needed by such groups. Nature of employment generated has normally been criticized for its poor quality and lack of longevity. To many local populations, major events are often viewed as an imposition from outside. Manchester 2002 did not succeed in establishing an inclusive approach to the decision making process. Community participation was lacking in Delhi 2010 as well; described as a case of misplaced priorities and an attempt at nurturing a fragile sense of national pride. After forced eviction and relocation to unfavourable property – a resident noted: “I was happy about London getting the Olympics, but we haven’t been treated right as a community. They wouldn’t have done it to any other people. No-one’s even offered us a free ticket.”

Image Legacy

Mega events are argued to expose a city/country to international audience with the ability to raise perceptions. Sports fans may enjoy their visit and return after the games, investors and venture capitalists may relocate manufacturing facilities, company headquarters, or start new business in the city based on their experience. Television viewers might decide to visit, seek work, education or to reside in the city based on what’s advertised. They could also inspire and bolster national pride, and unity that inspire confidence in a city/nation. President Nelson Mandela wearing the jersey of Francois Pienaar during the 1995 Rugby World Cup final in South Africa was a powerful  image message to the world that South Africa had emerged from its years of racial oppression and served to unify the country. Ray Nagin, Mayor of New Orleans exclaimed that the return of the NFL in 2000 was an important symbol of recovery from the hurricane Katrina.

However, in principle, a city's external image is generally durable. Mega events combined with an advertising campaign may influence specific aspects of a city's image which in turn may influence the decision to visit. However, a city’s image is normally compartmentalised in the psyche of an individual. A mega sporting event may well leave the overall negative aspects unaffected. Momentary spotlight doesn’t necessarily translate into sustainable growth. There is virtually no evidence (save for the case of Seoul) of post event testing of outcomes that were predicted. The claim that the events attract investment and tourism critical for promoting growth and creating employment is itself not tenable. No examples documented of companies moving operations or setting up businesses based on decisions attributed to the hosting of a mega event. Neither is there sufficient evidence of populations shifting to live in host cities after the hosting of such events.  

Mega events may as well taint the image of a city and negate the regeneration efforts especially when the media coverage is not managed to the advantage of the city/country. The riots across England in summer 2011 very well threatened the dividends of image that London 2012 Olympics organizers hoped to achieve. The ticket-empty seats mishap? Atlanta failed to capitalise on the Olympics publicity; the Central Park bombing, severe heat and humidity drew negative publicity and the press nicknamed the city – “Hotlanta”. Bribery scandal surrounding the 2002 Salt lake winter Olympics, the Terror attacks of Munich and Atlanta, the 1990 riots in Detroit during the NBA finals all served to taint the image of the hosts.

If you ask me: improvement of a city’s image and physical environment will not automatically address the fundamental structural causes of poverty. There is certainly no guarantee that a major sporting event will produce positive social and/or economic benefits for the host and it’s debatable as to exactly who, within the host population, benefits.

A 4-Point Policy Proposal to East Africa on the discovery of oil and gas in the region

This is an excerpt of a blog I wrote for Development Initiatives following up on the round table forum on the discovery of oil and gas in East Africa's and what it means for the region's poor held at the Hilton, Nairobi on Tuesday 3rd July 2012. This was a multi-stakeholder forum that converged key policy makers from government, civil society, the media, academia and other citizen representatives in Kenya. The Panel comprised: Tech Blogger, Robert Alai–Techmtaa; Maragua MP and Chair House Committee on Budget, Hon Elias Mbau MP–Kenya Parliament; Director Economic Affairs, Henry Rotich, Ministry of Finance–Kenya; Charles Abugre–UNDP; Kwame Owino, CEO- Institute of Economic Affairs – Kenyaand Social Justice Activist Okiah Okoiti Omtatah. Moderated by Charles Onyango-Obbo –Executive Editor for Africa and Digital Media Division, NMG

"If we are walking on gold, then why are we so poor” – sentiments of a Ghanaian Elder

Development Initiatives’ Africa hub hosted its first Africacounts round table forum on 3 July 2012. The purpose of the forum was to stimulate honest and constructive dialogue about the potential role natural resource revenues can play in addressing poverty, deprivation and inequality in the East African region. The outcome was the production of evidenced-based and inclusive policy messages to influence the use of East Africa’s newfound natural resource wealth for eradicating extreme and chronic poverty. It was a multi-stakeholder forum that converged key policy makers from government, civil society, the media, academia and other citizen representatives in Kenya. The forum situated the discovery of natural resources such as oil in Kenya and Uganda and natural gas in Tanzania within a poverty context, highlighting the potential impact that these resources and revenues could have on development in the region. Participants discussed the history of natural resource extraction on the continent and the prospects for East Africa.

Four key issues emerged from the discussions to inform policy decisions in the region:

 I: Develop robust fiscal policies to facilitate the effective management of emerging natural resources in order to optimise the opportunities that they could bring.

“The answer to effective utilization of East Africa’s natural resource find to address poverty and the pressing developmental challenges lies in treating the discovery of oil and gas as a public finance management issue.”

Henry Rotich, Ministry of Finance, Kenya

There needs to be reform within budget structures to allow flexibility in revenue allocation and in order to prioritise key development issues within pro-poor sectors. Suggested ways forward:

· expand the oil footprint in the economy instead of focusing on oil revenues as the driver of growth and for delivering public goods

· design and execute effective tax regimes that maximise on revenues from investors but also maintain a reasonable tax package to enhance the citizen stake in governance

· challenge the state’s role in the management of emerging resources and develop alternative modalities for managing and sharing the proceeds from natural resource discoveries

· increase citizens’ stake in oil production through the institutionalisation of mechanisms for key stakeholders, such as citizens and the government, to invest in the whole value chain in oil production.

"Why must the state dominate the management of emerging natural resources? Could we think outside the box?”

Kwame Owino, CEO, Institute of Economic Affairs

 II: Open information and increase civil knowledge. East African countries should commit to putting information about emerging natural resources into the public domain so that processes and procedures are more transparent. Greater effort needs to be made to enhance e-governance, develop open data initiatives and formulate right-to-information legislation.

“Put information about the actual oil find, terms entered into, agreements with multinationals and modalities for monitoring flow of revenue to the public… [...] Oil needs very careful control, open consensus with the public. [...] It is cash, a key foreign policy commodity.”

Charles Abugre, UNDP

III: Develop and maintain laws, effective institutions and policies capable of managing resources, regulating exploitation and ensuring maximum benefit for citizens. The function of a legislative and institutional framework should be to regulate revenue-sharing formulae, tax regimes, policy and legislative space for civil society organisations (CSOs) and citizens’ representatives. Without such regulation, profits from natural resource discovery can often lead to poor governance and corruption.

“Petro-dictatorship: Oil and gas find might herald an era of strong dictatorship in East Africa…”

Kwame Owino, CEO, Institute of Economic Affairs

IV: Increase citizen engagement in CSO and media space. There has been significant expansion in public engagement and participation in recent years. This emerging space provides an opportunity for CSOs and the media (especially new media) to play a critical role as citizen representatives to ensure that policy makers prioritise their needs when overseeing the management of East Africa’s natural resource wealth.

“Civil society, social justice activists and the media (including social media) shouldn’t wait for government to pass laws then complain.”

Robert Alai, Blogger Techmtaa, Kenya

The media and CSOs need to ensure that governments are held to account and are transparent about natural resource revenues. They must be proactive in influencing government action such as challenging malpractice, pushing through policy suggestions, proposing new or revised legislation in order to maximise the benefits of natural resources in addressing chronic poverty.

“We have been unable to effectively utilise what we have: that’s why we are poor.”

Okoiti Okiah Omtatah, Social Justice Activist

Follow this link for detailed information about the Africacouts round table forum