Kenyan Coffee and Nescafe

Monday’s Standard reports that Kenya is only consuming 5% of its own coffee production, terming this a risk to the success of the sector.

The Kenyan government’s lack of appreciation for the value of the cachet of Kenyan coffee was brought home to me quite quickly upon my arrival in Nairobi as director for the International Republican Institute. Calling on the Minister of Trade and Industry, we were served the usual choice of tea or instant Nescafe, as in the various other offices of high government officials and politicians. When the Trade Minister of a country with a reputation for growing some of the world’s finest coffee is serving Nescafe to his visitors, there is an obvious disconnect somewhere.

A local coffee house in New Orleans sells what it calls a Kenyan Press for brewing coffee. It appears to be quite the same as what the rest of us would call a “French Press”–basically a simple glass cylinder with a lid with a plunger with a screen to filter the brewed grounds and hold them at the bottom when the coffee is poured. Obviously the label “Kenyan” has market value to coffee drinkers. From my experience, it was in fact very hard (and unduly expensive) to actually buy a French Press in Nairobi.

It would be great to see Kenyans taking pride in the reputation of the quality of their coffee production and to see the government paying attention to promoting the market (rather, than, perhaps, being too distracted by worrying about who is going to win the next election).

Addendum:  Turns out I have a picture of the coffee maker in New Orleans, a Bodum “Kenya Coffee Maker” that is also labeled in smaller print “French Press”:

AfriCommons, on Flickr”>"Kenya Coffee Maker"

Here is a link to more information and reviews from “dooyoo”. “Cafetiere (the French for coffee pot) has become the established description in Britain but ‘French Press’, or ‘Coffee Plunger’ is used in other parts of the world,” says reviewer “suehome”.

Indian Ocean Newsletter: Jimmy Kibaki having no luck finding candidate

The Indian Ocean Newsletter reports in its monthly “free article” that Jimmie Kibaki, the President’s son, has been turned down serially by three politicians his Simama Kenya Youth Initiative has approached to back for State House in 2012. The most recent is Eugene Wamalwa, the younger brother of the late Vice President, who is said to plan to run under Ford Kenya. The original choice is said to have been Uhuru Kenyatta, who declined to leave KANU, followed by Deputy Minister Peter Kenneth.

Somalia and Kenya in 2010

HT to texasinafrica for this on Somalia.

And then read this about countries wanting get in on the financial action of supporting the AMISOM.

I’m sure with the situation in Yemen and the attempted Christmas Day airline bombing, Somalia will continue to distract the US from the unfinished and “overripe” situation in Kenya. I think that it is a shame that we focus on the places that we really can’t fix or do a lot about to the detriment of more realistic opportunities. Nairobi is in some ways unfortunate to be the diplomatic base for the US and others addressing Somalia–as well as the “back office” for aid organizations for NGOs, QGOs, etc. for both Somalia and Sudan. Not only does it mean that Kenya doesn’t always get the attention it deserves, or adequate funding for a country its size for a lot of programs to operate effectively outside Nairobi in a country of 40M people–it also gives a lot of direct and indirect leverage to “the powers that be” in Kenya.

I will say that it is good to see Hussein Ali, now Kenya’s postmaster after being moved out of his position as head of Kenya’s police, denied a US visa. Small thing, but at least a start in a direction that we haven’t followed through on in the past.

Continuing Corruption Story on Primary School Funds

The Standard reports on the numbers disclosed in the Nairobi Star story mentioned in my last post.

via The Standard | Online Edition :: New Sh5.5b puzzle hits Jogoo House school funds.

And make no mistake about how badly needed these funds are. The reality remained during my time in Nairobi in 2007-2008 that even in the capital the public schools were treated by parents as a last resort. Classroom conditions were very poor even where the exteriors were brightly painted, sometimes by advertisers. And of course no electricity. These funds were certainly needed.

Corruption: Kenya’s Cancer

This is a Sunday dose of impassioned moralism. It may not be to your taste.

AFRICOG has come out with a December report on the Maize Scandal. The Star reports that the Public Education Scandal is about to explode, indicating that the amount of directly missing funds is roughly Sh5.5B, with millions taken each year of the program during the whole course of the program! We are talking here about the rich and powerful exploiting hunger and the poverty of children to line their pockets that much more thickly.

This is not a traffic policeman shaking down a middle class driver for lunch money or petty bureaucratic clerk in a postal service. I don’t claim to be an expert on the world–and I am not arguing abstract development theory. Even if people like Ha-Joon Chang, and to a lesser extent Jeffrey Sachs, are right that Westerners from developed nations tend to overemphasize the importance and explanatory role of corruption in overall economic analysis, I think it is still clear that in Kenya today corruption is a metastasizing cancer that will be the death of meaningful democracy if left untreated. The fact that there is no defined “cure” does not mean that we shouldn’t do our best to treat it.

It is a fool’s errand to have high expectations of the kind of people who steal bread from the hungriest and school funds for the poorest–the bottom line is that they just don’t really care about anyone other than themselves. They can be counted on to be immoral or amoral at best and are not going to be actually subject to moral suasion as opposing to pretending. They might on some occasions for whatever reason do things that are desirable–they may have traits like physical courage or resoluteness or articulation skills that prove useful. But they can never be trusted. Likewise, people that steal elections are not democrats–and as the insightful quote in Michaela Wrong’s It’s Our Turn to Eat points out, stealing an election is pretty much the ultimate form of corruption in a democracy: it takes away the very sovereignty of the voting public and steals the most from those who have no other form of power other than the vote.

So what is the treatment? It’s not Tweets, nor, for that matter, blog posts. “Name and shame” doesn’t work where there is no shame. What is required is accountability which means prosecutions and asset seizures. If non-Kenyan actors and institutions want to help they will stop playing Hamlet and decide to consistently be in favor, and act in favor, of this type of actual accountability. The policy of my country, the United States, has been over a period of years, so inconsistent as to be incomprehensible. Likewise the British. France has become a big donor to Kenya for whatever reason–and has spoken some good words, but I haven’t picked up on much in terms of action.

We have arrived now at one of those times when both the US and the UK have shifted some in the direction of expressing dissatisfaction with part of the Kenyan political class in government. We have been here before and they have always in the past “gotten over it” before anyone went to jail or lost his or her ill gotten wealth. Before there was always a distraction or excuse that arose. Some other priority involving some neighboring country perhaps. I certainly hope that those lessons have now been learned. The patient is obviously sick and candy or sugar pills will not take the place of medicine.

Impunity Wins Again under GNU?: Business Daily reports “Pattni Gets Last Laugh in Grand Regency Saga”

The Big Story in Nairobi’s Business Daily reports the “closing yet another window for recovering billions of public money lost through the fraudulent gold export scheme” Goldenburg.

The newspaper has reviewed the reporting of the Central Bank of Kenya and discovered that it has written off Sh1.5B that remained due from a loan secured solely by the former Grand Regency Hotel.

The Business Daily reveals that the Cockar Report–delivered to President Kibaki but yet to be made public–concludes that the sale process was “flawed”, “secret” and “hasty”. The price received appears to reflect a gross undervaluation in that it could have been realized 13 years earlier–who thinks this hotel in downtown Nairobi was worth the same in the early 90s as in the late 00s?. Further, it appears that the Cockar Reports identifies a bidder who would have paid significantly more than the Libyan firm Laico–in fact an amount that would have paid the debt to the CBK in full!

The context: “Another commission, headed by Justice Samuel Bosire, concluded in a 2006 report that Kenya’s economy could have lost a total of Sh158 billion in the Goldenberg Scandal through a web of transactions that involved 487 companies and individuals.”; “Mr Kamlesh Pattni, who was named as a key player in the scam is understood to have surrendered Grand Regency to CBK in a ploy for amnesty from prosecution in the Goldenberg cases.”

Kudos to Business Daily Africa for diligence and solid reporting. Let’s hope they follow-up (in spite of the pressure I am sure they will receive not to).

Since I was working in Nairobi while this was ongoing, I can say that it was an open and obvious scam just from the basic issues that are apparently identified in the Cockar Report: secrecy, haste and an inexplicably low price.

The next question: Why? (in other words, who benefited?). Was this just a charitable impulse to transfer wealth from the Kenyan public to a group of private Libyan investors? Hard to imagine! What reason would the CBK have for selling to Laico for an amount that left a deficiency on the Pattni loan of Sh1.5B if another bidder was willing to pay the full amount and the hotel was probably worth even more? This would benefit neither the creditor nor the debtor. Did the buyers really pay more, in cash or other interests–just to someone else? Why the “haste” after so many years? Certainly the rumors at the time where that the dealmaking was wrapped up in the non-transparent financing of election expenses.

And why do we not have answers now?

As far as Pattni himself goes, it was interesting to see Pattni seem to spend quite a lot of money on his own Parliamentary campaign in Nairobi while getting few votes–and also see his “party” active elsewhere.

A basic rule of financial fraud that I have observed over many years is that if you want to steal and maximize your chances of keeping a whole lot of it if you get caught is that you should steal so much that you have plenty to spread around to “buy peace” afterwards. Sort of “the audacity of greed”.

Sudan Divestment

From Roubini Global Economics:

Pressure on China to Divest from Sudan

  • In early 2010, TIAA-Cref, which manages funds for many U.S. pensions, sold its stake in PetroChina, several other Chinese oil companies, and the Indian National Oil company that operate in Sudan. TIAA-Cref had tried to convince the companies to cut their ties with the country, arguing that the agreements prop up the Sudanese government, which has contributed to human rights violations.

Vendor Raises Red Flag Over Voter Registry–Business Daily

See important story in Nairobi’s Business Daily Africa reporting on concerns raised by a major UK-based prospective vendor on the tender for software and services for electronic voter registry. In 2007 the ECK voted not to use the technology purchased to report the vote tallies from the constituencies to the central headquarters at the KICC (and the Kreigler Commission essentially let the ECK decline to produce their records regarding this crucial decision made just before the election.) Key Returning Officers turned off their cellphones to drop out of contact at the crucial times. A successful election does not require a $400M project with controversial new technology.