Lessons from politics of capitalism and development in Kenya and way forward

President Uhuru Kenyatta with Ugandan President Yoweri Museveni, who is making an official visit to the country on December 19, 2017. PHOTO | PSCU

What you need to know:

  • Slowly, a culture that removed social differences emerged.
  • The government also enforced the law in an authoritative manner.

Kenya and Tanzania are neighbours. Uganda is also Kenya’s neighbour. Tanzania has been the poorest neighbour. Uganda has not been that poor. Kenya is the richest of them all.

And they got independence almost the same time, in the early years of the 1960s. Tanzania in December 1961; Uganda in October 1962; and Kenya in December 1963. Many other countries in Africa gained independence around that period. Ghana had tasted independence earlier in March 1957.

All these countries took different development paths at independence. Tanzania took a socialist path while Kenya walked on a capitalist path.

Uganda remained undecided in the first few years on which way to go.

BAGANDA

They picked on socialism but did not bold enough to say so. President Milton Obote even tore, literally, the constitution after his quarrel with the Kabaka of Buganda. He thought the constitution was preventing him from controlling the Baganda.

He threw it away. Things have never been the same since that time in the mid 1960s. For this reason, Uganda is an oddity for this comparison.

After Kenya and Tanzania decided to walk on different routes, they began to look very different. They looked different in terms of development and in terms of national cohesion and unity. They looked different even in terms of how their citizens clothed and fed.

The eating habits changed considerably. So did their manners, morals, and national values.

Let us take simple things first. In Tanzania, until as recently as the late 1990s, all citizens were almost equal in terms of incomes. Tanzania was obviously one of the most equal societies in the region. People did not have huge differences in incomes.

CAPITALISM

Before the 1990s, the government had nationalised all private enterprises. Everyone was a tenant of the government or a servant of the people of Tanzania.

Lack of difference among citizens in Tanzania was visible in the manner of dressing and, an important cultural element. Many dressed in kitenge.

Slowly, a culture that removed social differences emerged.

The rich were very few. But they were not very rich compared to the rich in Kenya. The poor were many. It was as if everyone had the same income because no one could notice this difference at all.

This played a role in establishing an inclusive society. This was hard to find among other neighbours.

Kenya’s capitalism and Tanzania’s socialism impacted differently.

Kenya did not admire Tanzania’s “poverty of development”. Kenya took a capitalist model of development from the outset. The colonial settlers had built a very strong foundation for capitalism. They used Britain — and specifically London — to set a benchmark for Kenya’s capitalism.

MOCKING

Kenya’s political and business elites were very different from those in Tanzania. The Kenyans had accumulated their wealth on basis of “eating from the government”.

In fact they belittled Tanzania’s elites whenever they spoke about them. They mocked them all the time for being “poor” and for their being unable to “eat properly” from the government.

The comparison and the mocking and counter mocking that took place between the two neighbours’ elites was often hilarious. Tanzanians understood Kenya’s capitalism to be driven by desire of individuals to make profits at any cost. They would say “Kenya is a man eat man society”.

Kenyan elites understood Tanzania’s socialism to mean community or collective ownership of property. They would therefore term Tanzania as a “man eat nothing society”.

This is how the difference in capitalism practised in Kenya and socialism practised in Tanzania were expressed. Individuals or groups whose interest was profit drove capitalism in Kenya. It did not matter how they made the profits. In other words, the practise of capitalism lacked moral values. It was driven by individuals interest in profits and economic power.

On the other hand, socialism in Tanzania had morals. It had a sense of responsibility. It had a moral basis because it committed everyone to the community and society in general.
FAMILY

People practised what was right for the community. This helped in building a common sense of belonging. What was good for community and the broader Tanzanian society was also good for you as an individual.

But what was good for you and your family was not necessarily good for the society. The society and your community came first in terms of your responsibility.

Until very recently, these values have been driving Tanzania’s public institutions. The community and society came first in terms of whom to serve. Individuals found it hard to cheat others. They found it hard to use public resources for individual benefit. It was irresponsible to do so.

The government also enforced the law in an authoritative manner.

This is the backbone of Tanzania’s national cohesion and unity. It is what binds Tanzanians together. They believe in the spirit of one nation – Tanzania. However, they have also embraced capitalism.

The last two decades have witnessed increased interest in promoting individualism at the expense of community and societal interests. The good old past is slowly drifting away.

PROFIT

Kenya’s capitalist system of development was and remains built on individual’s appetite for profit. Private ownership of property and control of wealth are the features of Kenya’s development.

Accumulation of individual wealth and investments for profit remain the central focus of individuals from the early years of schooling. The young and the old chase after money everywhere.

In the early days of Kenya’s independence, acquiring wealth while in government and making huge profits in business were connected by practise of capitalism.

This is where things went wrong for Kenya. This undermined national cohesion and unity because of how individual politicians and business elites got their wealth. More often than not, Kenya’s capitalism thrived on personal connections to the government and politics.

And because political competition was based on competition between the big and small tribes, Kenya’s capitalism also became tribalised. Capitalism became tied to friendship. In turn, friendship was tied first to tribe and then the economy. In other words, the relationships that emerged formed around tribal lines before becoming economic.

The capitalism practised in Kenya was the type often referred to as crony capitalism. Those in business prospered because of their connection to their friends in politics and government. Those in politics and government also got something of economic value.

TRIBAL LINES

Each got something in return. Politicians and others in government would receive favours from business elites in return for something with good economic value.

The favours that business elites would get were often large in economic value. It was often expected – and remains the practise – that the value would be shared between the two. In this way, those in business were not distinctively different from those in politics and government. The boundaries were thin and blurred over time because some in government would get out to venture into politics.

Business elites also had their eyes in politics more often than not. And because politics was practised along tribal lines, the divisions in business would assume similar pattern in politics.

In the 1960s and 1970s, crony capitalism thrived on investments in land. Many elites and specifically who had acquired money and education began to buy land left behind by the departing colonial settlers.

While this was done on basis of “willing seller willing buyer”, information on who was selling as well as relationship with financiers became important. This is where politics, tribe, and economics interlinked.

ELITES

A small group of powerful and tribal elites emerged to influence the making of decisions. This group captured the state and its institutions. The group would control the flow of information on policies, laws and even the markets.

Through their control of the state, they had access to information on what was up for sale and which institution would provide the required finances. And because they knew each other on basis of tribe and political ties, they managed to get better information on properties and finances. They passed this to each other.

Elites from elsewhere would get access to these networks simply because capitalism was based on friendship ties. What they would lack, however, was political influence.

They had to depend on tribal and influential peers to get the relevant political decisions on anything they wanted to access. This is what deepened the divisions between and among ethnic elites.
Crony capitalism tribalised the economy.

It tribalised the property market. Most importantly, it became the basis for income inequality in Kenya and regional imbalances in development. First, the rich became and continues to be richer.

DIVISIONS

The poor have continued to be poorer because of limited investments in public services which would have meant better opportunities for all.

Regional imbalances widened because the elites in politics disbursed development resources on basis of friendship ties – just like the businesses they connected to. These then have continued to be the basis of tribal divisions.

Solution to these problems lies in promoting inclusive development. This is the type of development that does not leave anyone behind.

Revitalising small holder agriculture, livestock farming, and fishery development, can play an important role in improving household incomes.

Solution also lies in increased investment in provision of public services and more so improving access to education opportunities and health services. All these require a change of development policies, change of mind-set, and getting the county governments to work along these solutions.

Whether crony capitalism can allow these solutions to work is a subject for another discussion.

Prof. Karuti Kanyinga is based at the Institute for Development Studies (IDS), University of Nairobi; [email protected]