Illicit financial flows squandering the fortunes of our future generations

If you have been having trouble trying to wrap your head around the mystery real estate boom in Kenya, or the 8 range rover sports you meet per Km on Mombasa road of late, there could be an answer here.

Read Bob Okande Austine​'s - 'Money laundering: The tag real estate can’t shake off' and Lilian Merab Mwakio​'s - 'Kenya loses over Sh600bn every year in tax evasion'. Then put that together with the Kshs300 billion the Auditor General perennially reports unaccounted for without answers - 'Sh500b State funds cannot be accounted for, says Auditor General Edward Ouko' 

The graph below illustrates the illicit financial flows, unaccounted public funds compared to other streams finances to Kenya. Migrant remittances data obtained from World Bank's Prospects; external debt data from World Banks - International Debt statistics 2015 report; FDI and exports data from UNCTAD; Official Development Assistance data from OECD-DAC's Creditor Reporting System; and unaccounted for public funds data from Kenya National Audit Office (KENAO).   

Are people laundering contraband money, evading tax and stealing from public coffers then showing up looking cool, flaunting 'hard earned legit investments'?

OR Is our economy genuinely growing and increasingly profitable to private enterprise?

The spat between Dambisa Moyo and Bill Gates and its relevance to Mrs Kenyatta’s #BeyondZero

So Bill Gates claimed that Dambisa Moyo’s book Dead Aid ‘promotes evil’ and that she knows little about aid. And Dr Moyo responded (in her blog) that she got a PhD in economics and wide experience, how about Bill?

Reading through the articles about this confrontation, I couldn’t help but relate with the ongoing debate in Kenya regarding the appropriateness of the #BeyondZero campaign aiming to mobilise donations to improve maternal health sponsored by Kenya’s 1^st Lady Mrs Kenyatta. There are those who laud the good lady for such a noble initiative. Then there are those like my friend Rita Oyier who rightfully ask: ‘Why should I pay taxes then run again” – alluding to the fact that if public finances were better managed, we would not need marathons and donations to fund maternal health.

The tragedy with the aid debate remains the fact that there are a bunch of skeptics (the likes of Bill Easterly and Dambisa Moyo) on one side and another lot of maniacs (the likes of Sachs and Gates) on the other end shouting at the top of their voices and preventing honest, factual debate on aid.  We know that neither of them is absolutely right.

Whilst aid has alleviated suffering (especially in humanitarian crises), improved infrastructure and promoted better institutions for governance and management of the public sector in Sub-Sahara; it has also distracted governments from effective Domestic Resource Mobilisation, economic diversification, or private sector development that would provide sustainable solutions to the problems aid has dealt with.

But aid skeptics (like Dambisa Moyo) fail to provide practical, logical, credible alternatives.

Dr Moyo benefited from aid in the form of scholarship to earn her Havard education (like many Africans continue to do). Bill Gates should know that countries like Burundi have up to 40% of their budgets funded by Official Development Assistance not because they cannot increase domestic revenues but more because aid has been made available.  

So calling aid ‘dead’ (Dr Moyo) or claiming that the book ‘Dead Aid’ promotes evil (Gates) does not help.

On the Kenyan example re - #BeyondZero. I think the campaign is well intended but the First lady could use her influence (being the person who goes to bed every night with the holder of the policy pen), to institutionalize a stronger, more effective and sustainable solution to financing maternal health in Kenya. 

She could begin with sponsoring a bill to increase and ring-fence maternal health funding in the annual budget. 

What happens when another 1^st lady comes who doesn’t give a rat’s ass about maternal health? Michael Jackson and a constellation of stars sang ‘We are the world’ in 1995 to mobilise resources for Sudan. Is the problem solved today? Billions of dollars was donated to support Haiti after the devastating earthquake, but has the problem been addressed?

I am for complementarity. Neither aid nor the market/growth focused approaches will succeed in isolation. But if we complement prudent Public Finance Management with effective development cooperation, we have a chance. 

My 2pence!

On the ensuing Digital Migration debacle - Kenya Govt (CAK) Vs ADN Consortium

1.  It’s simple arithmetic – who loses most from the continued switch-off of SG, NMG and RMS? Ask yourself what immediate gains the GoK would accrue from the hasty migration to digital; in terms of revenues? media space for Kenyans? investment? trade? And what does the government lose: - revenue dips, eminent job loses, shrinkage of media space as the coalition members continue the shutdown. Do the math. It is not the government, neither is it so much the media - its Kenyans on the losing. Those of you who will soon be laid off; those of you who are bored stiff because you have no DSTV to watch todo sobre? Those of you who will not get public services because KRA failed to reach revenue targets because in some month in 2015 – some media houses were making loses.

2. Whilst governments elsewhere, in both the developed and developing world endear themselves to investors, make doing business easy, ours is actively stifling business and pushing away existing investors and crowding out potential ones. Why, because of egocentric tea-cup storms between a state agency and private sector!

3.  Granted we need an effective and efficient regulatory environment for the media – but at what cost? Granted we need to open up to the opportunities that digital migration portends, but at what cost? It is in the interest of government and the obligation of government to ensure that a speedy and lasting solution is found.

4.  So you hear Information Cabinet sec ranting how right government is and how wrong the ADN coalition is, you wonder why finance cabinet secretary – and all the folks that spend endless sums of tax payer money ‘wooing investors’ aren’t say a thing.

5.  These media houses have themselves succeeded in showing Kenyans how much they don’t matter. This should serve as a lesson to them – that as much as its business, it is the kind that is dependent on effective institutions of governments - which ‘the people’ have a way of influencing. A decade ago – people would have been on the streets protesting this switch off. But the ordinary Kenyan today has been showed the middle finger so much by these media houses, in the conduct of their coverage that no one gives a hoot.

6.  This is from my conspiracist closet. Come to think of it – aren’t these media houses the same ones largely controlled and bankrolled by Kenya’s cabal of current politicians? Why haven’t people pulled the ropes to save their businesses? 

Kenya's Start-up tragedy:

Pilotitis, policy failure and the absent domestic investor confidence in young entrepreneurs

Two days ago, I attended a World Bank sponsored consultative forum on the World Development Report – 2016. I got myself caught up in a riveting discussion on scaling up start-ups and why it has thus far been problematic in Kenya. I have banged my head ever since about this. I couldn’t resist ranting the two pence opinion I didn’t get a chance to dispense at the forum. Well, here it is:

Investors and young entrepreneurs – two worlds apart

There is a fundamental disconnect between Kenyan young entrepreneurs and possible domestic investors. Notably, the typical (prospective) Kenyan investor is wired for hard concrete investments: real estate, construction, agribusiness, and manufacturing. Tangible investments that come with lesser risks of uncertainty. Not 'faith' in some 'pizza ordering' 'direction pointing' 'weather predicting' or 'breathe alcohol level calibrating' app developed by a weird spectacle, jeans-tshirt-trainer wearing 19 year old at iHub least known to him.

Make no mistake, Kenyan investors have serious dime. Some of the machines these folks show up with in town; some of the homes we see on TV after some Karen-Runda tragedy - they spell BLISS, BLING, BALLING. Some of them were acquired by giant multinationals, others learnt the genius of business in +254, and some in mind blowing hereditary wealth.

A quick census - they are 60 - 70 year-olds who do not understand and care least about ICT revolution, big data, new media, the internet, yadda yadda. They are traditional conservatives who hang out at analog exclusive membership clubs and enjoy the country, game, and choma more. You sure won’t find them at Nairobi Java, or Brew Bistro or Michael Joseph Centre or Strathmore or Nailab or Mojos where our start-up entrepreneurs elect to quaff their chaff as my good friend Tom Osanjo puts it.

‘Pilotitis’ – too poor to sustain start-ups

We are too poor. Our young people survive on very thin limited resources that can never support their maintenance (food, transport, accommodation) as they concentrate on C++, python, SQL, Java etc birthing some bad-ass Sportify-alibaba-uberlike idea.

People have got to eat; it is only logical that entrepreneurs will pursue projects for as long as they meet their immediate rudimentary needs; not the Facebook or Apple the project could metamorphosise into a decade from today. Maybe our entrepreneurial culturing is still inept - in shaping the correct attitudes and discipline needed to see through an idea to its fruition however long it might take, however frustrating it could be. So that we don't drop ideas as soon as they fail to meet our immediate expectations. 'Pilotitis' - that's what my friend John Kinuthia calls it.

Maybe our investors as well aren't ready to cough out million after million into projects without obvious direction towards success, surplus.

‘Expat capture’ – domination of the start-up scene by foreign social entrepreneurs

Then there is the clever 'mzungu'. The bearded, man-bag carrying, sun loving MIT, Stanford, Georgetown, Oxford student that jets in with substantial funding, and fancy save-Africa social entrepreneurial ideas. From the 'brick' to every other M-something (M-kopa, M-changa, M-ngombe, M-Gormahia) these folks have clogged up the start-up scene in Kenya (no Nairobi, it seldom leaves the capital).

I am a staunch proponent of knowledge transfers and spill-overs, but am also well aware of the dynamics of multinational domination and crowding out of local enterprise and innovation. Lord! that might have come across a tad bit too leftist!

There are the awesome ones - I hear the genius of M-Pesa was born by their ilk. Then there are the stealthy borrow ideas-pimp ‘em up-come back to Kenya-bang new idea kinda guys. And of course the mundane-nothing to write home about-boring ones with ideas not worth the visa or Nairobi mahindi choma lot.

Point is, all these folks play in a concerto of domination that easily and unknowingly downgrades Kenyan start-ups, unfairly competes for investor limelight/attention and could demoralize budding home-grown talent. I sound ridiculously political on this right?

Policy failure

Controversial as it may sound, the role of government, institutions, policy, or legislation in propping up start-ups is profound. Whether in setting up the requisite infrastructure (like broadband), guaranteeing funding, or providing the regulatory environment (for example protection of intellectual property rights).

Am willing to argue that the government of Kenya has equally failed our start-ups (someone said that 'government' is an amorphous nothing entity). Yes this is stuff that is best executed by the private sector and facilitated by market dynamics. But for a country with such an acute youth unemployment problem, it is in the interest of government to put together a working framework for nurturing and supporting homegrown entrepreneurs especially after proclaiming our intentions to build a knowledge economy - Konza, Tatu City blah blah.

And I don't mean dishing out Kshs 50,000 to young people hurdled into groups of 50 to hatch one day old chicks in the name of Uwezo Fund, Youth Enterprise Development Fund, Kazi kwa kijana and the likes.

The Missing link between knowledge and post-class work experience

A few weeks before exiting the University of Birmingham, I had the opportunity to attend free seminars and tutorials on penetrating the job market. Resume building, pitching, presentation skills, the works. No offence, but the education system in Kenya (can’t speak for other Sub-Saharan countries) fails flat in preparing students for the post-class work experience.

This largely explains the inability of many of Kenya's young entrepreneurs, with brilliant ideas to market, sell their genius; to speak to the right audience and to win investor confidence.

Yes, you learnt programming at JKUAT and are extremely good at it - developing apps. Yes you studied design at Maseno University and you are superb at crafting Ankara-African apparels. But you end at that. You cannot explain yourself in 2 minutes to a Chris Kirubi at a cocktail at Alliance Francaise or to a Bob Collimore at the gents at Ngong racecourse, or to a Vimal Shah on the elevator at Lonrho House.

How will you ever get your idea funded? scaled up?

The missed opportunity in industrial clusters

What we sure lack, and which kick-start, sustain and encourage entrepreneurship especially in knowledge driven economies in other parts of the world are industrial clusters. Where knowledge meets industry and investors and policy support.

Across the globe start-ups thrive in such unique clusters. See the ICT & Biotech clusters in Massachusetts, the engineering clusters in Batten Wurttemberg Germany, the Silicon Valley, Emilia Rogmana & Tuscany's automobile and apparel clusters in Italy; Toyota City in Japan, Scotland's Silicon Glen, Sinos Valley in Brazil, Daegu South Korea, the French Sophia Antipolis, the examples are plethoric.

What is Kenya doing to get there? The famed Thika town of our high school days?

Skewed focus on tech start-ups masking other entrepreneurs

I will say one last thing, then shut it, before I cause me trouble. This one will not go down well with some of my tech and media folks.

In Kenya, there is a skewed focus on tech oriented start-ups. So much so that it makes entrepreneurship today almost synonymous with an ICT oriented something. And it need not be so. Mainstream media most often highlight techy stuff, maybe because tech is sexy and savvy, or they are easily accessible, or because of elite capture or simply because they are the more of our young entrepreneurs. I don't know!

But surely, this near obsession with tech start-ups almost masks substantial developments in other areas like agribusiness, art, new media, that could do with the light.

Maybe if we broadened our focus, coverage (now am talking to the media hehe), we could discover more young Kenyans, struggling with marvelous ideas that could create employment and get our young people off want and trouble. Remember the pencil portrait super-guy who did President Kenyatta the other day. Imagine how many more of such are out there unnoticed.

I rest my case on Kenya's ‪#‎Startuptragedy.

Yours truly - Okwaroh Ja Paprombe

Thank You so much for 2014

Yours truly has got many things to be grateful for; but to you I can never say thank you enough. This, 2014 you came through for me big. Am honored and truly thankful for your kindness, wit, and love. This is to wish you a happy and prosperous 2015. Asanteni sana!

• Amber Westerborg
• Atkins Oriko
• Beatrice Kodero
• Beryl Magwa
• Beryl Ooro
• Betty Mithia
• Charles Lwanga-Ntale
• Cosmas Butunyi
• Davis Adieno
• Debra Ojuka
• Eastone Owino
• Emmanuel Oduor
• Emmanuel Rukundo
• Esther Kimani
• Evelien Bosch
• Hilary Ngeso
• Jason Braganza
• Joseph Bonyo
• Kapere Ndege
• Karen Rono
• Kingsley Sheteh
• Mariam Ibraim
• Mike Wamaya
• Peace Nganwa
• Sally Owuonda
• Samora Kapere
• Stephanie Tung
• Steve Kenei
• Twailer Chelal
• *** (someone am not allowed to mention his name here; you know who you are)

"Let no one ever come to you without leaving better and happier" ~ Mother Teresa

They gave us a 'non-NATION'

I want a neo-KENYA. Give me my Kenya – OUR Kenya. 

They gave us a 'non-NATION' - a country; a state - patched up space inhabited by conveniently settled ethnicities.

They gave us a ‘non-NATION’ - lands and wealth they already stolen from us - owned by them; not us.

They gave us a non-NATION - a creed; a prayer to cram; an anthem to brainwash us and our children and our children’s children to the fakeness of a NATION that never existed.

They gave us a non-NATION – a flag; an insincere symbolism of fake blackness (Afrianness); fake redness of blood of just a few important ones; fake whiteness of non-existent peace riddled with undertones of deep hatred; fake greenness of the lands – flora and fauna not ours but theirs.

They gave us a non-NATION - already deeply unequal; deeply divided; deeply sectarian.

They called it Kenya; but there was never a NATION. Just a country - an engineering of the people who wanted it to stay that way – a country, coordinates on the world map, an enterprise; a corporation; GDP; because they profited from it and planned to profit from it further. Not develop us.

So forgive me when I disregard that freedom twaddle. That self-decided heroism. 

I am Kenyan; but I do not know what Kenya really means; what Kenya truly stands for! Because that’s the dishonest vagueness that was handed down to me by our greedy; selfish fore-fathers; our ‘heroes’. And am expected to pass it down that way – religiously to my unsuspecting children.

What did they free us from? Poverty? – NO. Disease? – NO. Ignorance? – NO. Gave us better institutions to govern ourselves? NO – in fact they screwed up some of the white man’s better legislation/laws.

So what are they heroes for? Fighting for they stomachs and their children's stomachs? Or for conquering their subdued folks?

So why should we sing their names; why should our children be condemned to cramming; reciting the names of a people so selfish they took our nation even before we began. Why should our streets, our schools, libraries, hospitals, bridges be named after them?

They gave us a non-NATION – Luo, Kikuyu, Kamba, Kalenjin, Luhya etc NOT Kenya. But they baptized us Kenyans. Divided us into ethnic little-hoods but remembered to balkanize us into a fake ‘nation’ – Kenya.

A Kenya to refer to when legitimacy to plunder further is needed; A Kenya to summon when authority to dominate is required; A Kenya to call on to when sovereignty to protect themselves and their perverse wealth is of the essence.

They gave us a non-NATION. Hungry; sick, ignorant and esteem-less beings - oppressed by the white man and fleeced, raped, maimed and killed by the black 'hero' – the Shujaa!

I want my nation; our nation. A redefined meaningful sense of nationhood - that inspires genuine patriotism - not forced; fake sense of sovereignty - Kenya one-ness that never exists.

I want our 'nation' - of fairness in opportunity;

I want our ‘nation’ – of greatness in aspiration and discipline to work and live our dreams;

I want our 'nation' of inalienable rights to own something; to share our prosperity;

I want our nation of some sort of ‘true morals’ – not shameless double standing.

I want a neo-KENYA. Give me my Kenya – OUR Kenya. 

10 Kenyans be sure to find down the comments section

For Kenya, sometimes when there is little time to read the whole thing, go to the comment section and have some fun. Thou shalt find:

1. The sectarian, ethnocentric tribal lieutenant. Does not give a rat's shit who said it, what it was, how it was said - so long as the title says something against 'baba' or inches close to Uhuru-not-good. You can predict the rest of the text.

2. The wannabe PLO. The cheap, ordinary Kenyan who just found some space to excise with the few words they picked up off the thesaurus. 'Cantankerous' 'Idiosyncratic' 'Exasperating' 'Plebiscite' 'Achondroplasiastic' etc. Too many disjointed grotesque jargon devoid of substance (notice am trying to do it).

3. The verbose one: - hehe the one who should just go write a rejoinder or response to the article. Missed the communication skills class on 'summarising'. Comments always close to the size of the main article itself. And they can do many of them by the way.

4. The intellectual conman. The truly intelligent one with no sense of occasion. This one will tire you with theories of Walt Rostow and Socrates and Niccolo Machiavelli and Adam Smith. Has a point but fails to notice the diversity of the audience. Will easily loose you in their argument. Most of the time it is for show (you can bet his/her name will begin with a vowel 'O' or 'A' hehe).

5. The vulgar fraction. Do not spend time looking for the point. It is all about insults and abuse and shameless vulgarism. You either get pissed off if you are new to this stuff or learn to see the humour. Their comments are full of 'F' and 'D' and 'P' and 'C' words.

6. The shameless pitcher: This one smells opportunity. Never mind the article was about maternal mortality - they will post a link to their facebook fan page advertising their 'Ongata-Rongai world-class fumigation services'. They obviously never read the thing - they just saw so many people who are worth the pitch.

7. The know-it-all, ‘diasporic’, well-travelled, seen-it-alls. Their exemplification is full of "in the west" "in Europe" "in the States" "Go to Abu Dhabi you will see' etc. They will demean all other comments with their global views and self-righteousness.

8. The sorry slow-head. Never gets it. Bad spelling; terrible grammar. Arguments always out on a tangent. Lacks even the simplest and most obvious facts. You wonder why they showed up on the comment box.

9. The ruthless, die-hard debater. Has too much time. Probably lives on the net. Commenting, debating, hating is their job. Must have been in those upper-primary debating clubs of "a teacher is better than a doctor" Do not start an argument with them. It never ends.

10. The crack-head clown. Funny chap who draws humour out of even the dimmest most mundane comments. There is always something to make fun of and people like their comments a lot.

What kind of audience are YOU?