Obscene display of wealth an affront to all those with barely enough to eat

The entrance of the Villa Rosa Kempinski hotel in Nairobi. FILE PHOTO |  

In Summary

• Forty per cent of Kenyans, or 18 million people, live on less than 160 shillings a day, largely, says the report, because Kenya has failed to bridge the inequality gap, and is being run like a “casino economy” that only benefits the rich.
• It is a country where some children are not going to school because their parents cannot afford the Sh500 needed to pay for a school uniform, while other children are being chauffeur-driven to school in cars that cost more than Sh20 million.
• Corruption, money laundering, fraud including fake shell companies, stock market manipulation, under-invoicing, poorly thought-out contracts with players in the extractive industry, organised crime, drug trafficking and other criminal activities have contributed to these illicit financial flows

By RASNA WARAH
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A ritzy Nairobi hotel offered guests special 2.3-million-shilling suites on Valentine’s Day, which apparently were fully booked.

A Nation reader, disgusted by this insensitive display of wealth, stated: “It is ridiculous that within a kilometre radius from the hotel, there are countless people who cannot afford to eat a full meal or feed their children.” He said it would have been wiser for the hotel to spend the money on a charity instead of encouraging this type of obscene extravagance.

The Valentine’s Day offer only served to highlight the yawning gap between the rich and poor in Kenya. A report by the Institute of Security Studies says that Kenya has the sixth largest number of poor people in Africa, after Nigeria, the Democratic Republic of the Congo, Tanzania, Ethiopia and Madagascar.

Forty per cent of Kenyans, or 18 million people, live on less than 160 shillings a day, largely, says the report, because Kenya has failed to bridge the inequality gap, and is being run like a “casino economy” that only benefits the rich.

It is a country where some children are not going to school because their parents cannot afford the Sh500 needed to pay for a school uniform, while other children are being chauffeur-driven to school in cars that cost more than Sh20 million.

So what happened to the “Africa Rising” narrative that generated the widely held opinion that African countries were set to join the league of emerging economies within the next two decades?

BRIGHT FUTURE

The Jubilee administration has been promising Kenyans a bright future with mega projects designed to fast-track growth and reduce poverty, but cynics believe that rising debt arising out of these projects could slow down growth and lead to an economic melt-down if not managed properly.

A TED-x talk in London by Ali A. Mufuruki, a Tanzanian who has had a successful career in the corporate world, paints an even more pessimistic economic forecast that shows that Africa is still light years away from achieving significant reduction in poverty levels.

Notwithstanding significant oil discoveries, African countries have been unable to harness gains from oil for the collective good. For instance, between 2009 and 2011 Nigeria lost 136 million barrels of oil through a combination of theft and sabotage.

Sub-Saharan Africa also has the largest proportion of people relying on fuelwood and charcoal for energy. In Kenya, and in the region in general, the average proportion of people relying on fuelwood and charcoal is between 70 and 80 per cent, an unacceptably high figure, considering that five of the largest oil and gas discoveries in 2012 were in Africa.

Mufuriki argues that Africa will not rise if it does not have electricity to power industries; it cannot rise if it does not invest in technology; it cannot be classified as rising if a large proportion of its children are hungry.

BAD LEADERSHIP

Importantly, corruption, bad leadership and theft of the continent’s resources will cancel gains achieved in productivity. The last point was highlighted in a recent report by a high-level panel of the African Union, which warns that illicit transfer of funds from Africa is costing the continent more than $50 billion a year, and impacting economic growth rates.

Corruption, money laundering, fraud including fake shell companies, stock market manipulation, under-invoicing, poorly thought-out contracts with players in the extractive industry, organised crime, drug trafficking and other criminal activities have contributed to these illicit financial flows.

The report notes that East African countries lost an estimated Sh1.5 trillion ($16 billion) between 2001 and 2010 through illegal financial transfers by businesses and criminal networks and through corruption, which costs these countries between 1 and 6 per cent of their GDP every year.

Unfortunately, we do not have the political will or role models who can reverse these alarming trends. Our business and political leaders have entrenched what security expert Trevor Ng’ulia calls a “primitive accumulative society” that cannot see beyond its nose.

Something’s gotta give. I am not advocating a Cuba-style revolution, but I do think there is a serious need to evaluate our priorities as a people, as a nation and as a continent.

(rasna.warah@gmail.com)