Watch out lest the proceeds of graft are used to fund costly election campaigns

Opposition leader Raila Odinga speaks during public forum on Eurobond issue at Ufungamano House, Nairobi, on February 11, 2016. In a series of articles, economist David Ndii highlighted how Sh140 billion raised by the country’s 2014 entry into the Eurobond market was never reflected in the government’s bank deposits. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

What you need to know:

  • Certainly, corruption seems to have reached unprecedented levels in the past year, as a series of high-profile scandals - such as the fate of the country’s Eurobond billions and National Youth Service (NYS) funds - have been accompanied by a localisation of graft through devolution.
  • Thus, in a series of articles, economist David Ndii highlighted how Sh140 billion raised by the country’s 2014 entry into the Eurobond market was never reflected in the government’s bank deposits.
  • Given that the government had sufficient funds for existing budget lines, Dr Ndii argues that the money must have been pocketed by politicians and officials through the inflation of various project expenditures.
  • Reports suggest that an estimated Sh791 million was lost by the NYS in suspicious payments to private companies, with allegations of corruption also bedevilling various other sectors - from the collapse of Imperial and Chase banks to large-scale infrastructure projects.
  • At the same time, new county governments enjoy substantial budgets and new layers of fund-raising, procurement, and planning, but lack institutionalised oversight mechanisms, which has provided new opportunities for corruption.

In the wake of the 2011 election, Uganda witnessed inflationary pressures and depleted state coffers as a result of excessive campaign spending by the ruling National Resistance Movement (NRM).

In this context, the opposition organised “walk-to-work” protests, which led to several deaths and months of disruptions.

Following the recent elections in February, Uganda does not seem to be experiencing the same kind of economic problems.

According to some analysts, this suggests that the NRM spent less money than in 2011.

For example, at a recent workshop on the Ugandan elections in Oxford, participants Frederick Gooloba-Mutebi and Sam Hickey argued that the 2011 economic crisis had embarrassed President Yoweri Museveni’s government and the regime had subsequently relied more on the use of soft power (such as charisma and strategic campaign messaging) and formal institutions.

However, while most participants agreed that President Museveni and the NRM had learnt from the 2011 economic crisis, the general sense was that the lesson was not to spend less, but to raise money in different ways.

Thus, while the government had printed additional money and made supplementary budgets in 2011, it seems, in 2016, NRM activists relied more on donations and use of development and project budgets to channel resources to potential supporters.

In addition, it seems some people may have siphoned off money from various budget lines over the entirety of the inter-election period.

CORRUPTION HELPING HAND

The implication is that corruption helped fund political campaigns, rather than simply lining individual pockets.

The question is whether the same thing is happening in Kenya.

Certainly, corruption seems to have reached unprecedented levels in the past year, as a series of high-profile scandals - such as the fate of the country’s Eurobond billions and National Youth Service (NYS) funds - have been accompanied by a localisation of graft through devolution.

Thus, in a series of articles, economist David Ndii highlighted how Sh140 billion raised by the country’s 2014 entry into the Eurobond market was never reflected in the government’s bank deposits.

Given that the government had sufficient funds for existing budget lines, Dr Ndii argues that the money must have been pocketed by politicians and officials through the inflation of various project expenditures.

Reports suggest that an estimated Sh791 million was lost by the NYS in suspicious payments to private companies, with allegations of corruption also bedevilling various other sectors - from the collapse of Imperial and Chase banks to large-scale infrastructure projects.

At the same time, new county governments enjoy substantial budgets and new layers of fund-raising, procurement, and planning, but lack institutionalised oversight mechanisms, which has provided new opportunities for corruption.

The question is where the money has gone, and what it will be used for.

MONEY FACTOR

Critically, the lessons from the early 1990s and Kenya’s infamous Goldenberg scandal, and from Uganda’s recent election, is that much of it may be used to fund increasingly expensive poll campaigns.

This includes money for T-shirts and posters. It may also be used for helicopters and other transport costs, and the facilitation of local mobilisers and activists.

It also includes targeted development projects and cash payments to those who attend political rallies.

For some, this may not be particularly problematic. Money does not necessarily ensure votes, and it is possible for people to eat with one politician or party, and to vote for another.

In this context, the largesse shown by politicians during election campaigns can simply be seen as a form of redistribution.

However, such an ad hoc approach to redistribution encourages an inefficient use of state resources and directs money away from development projects and services that could benefit everyone to individuals.

At the same time, this approach clearly favours incumbents at both the county and national levels.

Finally, it fuels a vicious circle, as opportunities to accumulate wealth through politics become both a motivation to stand, and a means for sustaining one’s position.

In short, more questions need to be asked about corruption, and about where the money is going, and how it is being spent so as to minimise the extent to which graft distorts the country’s politics, as well as its economy.

At the same time, such logics have implications for anti-corruption campaigns due to the need to address the issue of increasingly costly elections.

The writer is an Associate Professor of Comparative Politics at the University of Warwick, UK. [email protected]; @GabrielleLynch6