Ejike E. Okpa
Q.What is your take on Kenya's Vision 2030?
Okpa: Kenya’s Vision 2030 is a boiler plate document. Although it has received support and legislative backing, what would have given it teeth is lacking. For instance, it says nothing about high interest payment on borrowed money. If Kenyans borrow at nearly 35%, how is that sustainable? How will local business folks survive? It says nothing about monetary and fiscal policy and how to effectively reduce unemployment, stabilize the Kenyan Shilling, improve healthcare budget, increase local revenue and stop Kenya from aid dependency. Kenya’s national budget is heavily dependent on donor subventions and aid. That is why the country is under foreign influence and corruption is high. Whoever goes a-borrowing must go a-sorrowing, and be a doormat for all. Kenyans ought to pay taxes as a way to exert stake in their leadership and demand more. When one does not pay taxes, they have no say in their government. Therefore, the Vision does not introduce an effective and well administered tax system that is fair and equitable.
Real estate constitutes about 70% of a developed nation's economic wealth. It is a not a rule of the thumb, but a pretty well documented indicator. In Texas, local government’s revenue that makes up 45-55% of their budget is property tax. Because real estate is local, it proves to be a significant measure to gauge how well a country is doing. While Nairobi has the largest slum in the middle of an urban area, the document says nothing about that. An average Kenyan has difficulty finding affordable housing.
Q.The cost of borrowing in Kenya and Africa as whole is quite high and stifles economic development. Kenya however leads the world in Savings & Credit Cooperatives (Saccos). In fact most of these Saccos are members owned (like US credit unions) and their rates are fixed and manageable to ordinary people.
Okpa: I don’t know where you get the facts that Kenya leads the world in cooperatives and savings. While such is a commendable feat, such institutions in the overall scheme of things are not the vehicle for serious economic development structure, programs and projects. It is like trumpeting the virtues and values of solar, wind and thermal energy sources as the way to go. Well, all those sources combined, do not contribute up to 2% of US energy needs. They get revving reviews, but they do not drive the energy sector and will NOT in the foreseeable future. Wisconsin and Minnesota in US have great cooperative models but even with that, the rest of the 48 states have refused to copy the model. Two states, Texas and Alaska, have more than 70% of US savings of all 50 states combined and Texas Economic Development Bank is a model only Texas has. I am the second black in the history of the bank to serve on one of the boards.
Although cooperatives, are good, they are not a substitute of paramount financial vehicles. They are not equipped to handle heavy duty infrastructure projects. Until Kenya’s financial institutions differentiate between consumer and capital projects, passing usury law limiting interest rate charged on certain projects, it is a knee jerking lending.
Kenya in 1975 was one of the early countries to be assisted by the IMF, almost the same time South Korea (SK) was teetering. But in 2004, South Korea and China became the first two countries in the world to achieve combined foreign reserve totaling A TRILLION DOLLARS. Because of South Korea’s fate, she was invited to join the executive committee of IMF for transforming from a recipient nation to a donor. That is why a South Korean American is president of the World Bank, nominated by a Kenyan-American who happens to be President Obama.
Kenya since independence has had no more than five presidents, different from most other African countries that after independence engaged in coups and civil wars. But stability as a tool of effective leadership has not produced for Kenya a reputable economic development ascendency. The Kenya Shilling has lost most of its value against the Dollar and Pound, such that a Kenyan millionaire is only worth about $14,000 while an Ethiopian with one million Birr, is worth more than $66,000. Do the maths and see who has more purchasing power. President Kibaki, is one and probably the only African head of state to make first class from London School of Economics, what has that gotten Kenya?
Q. Visiting Lagos and Abuja cities in Nigeria, one is taken aback by the contrast of the two cities. It's not uncommon for a highrise building to be located next to a shack in Lagos. Why is the State of Lagos attempting to create new land in the Atlantic Ocean while developing various parts of the city/ state would free up much needed land?
Okpa: Lagos, according to CNN, is an expensive slum, and I second that opinion. The Lagos plan was what Lord Lugard, then Governor General of Nigeria, who was later transferred, took to Hong Kong and turned that city into a world class destination spotting more high-rises than any other city in the world. Lagos had electricity in 1894, nearly 119 years, and 15 years after electricity was discovered in 1879. For more than a century however, Lagos looks like a dump, and Nigeria’s entire power output is less than what it takes to run Manhattan – go figure. The science and engineering since it was discovered has virtually remained the same.
I know Lagos, and I attended college in Nigeria before coming to US. My dad was a Chief in colonial Nigeria, after independence, during the war and after, so I have been around political figures. He was member of the Eastern Nigeria House of Chiefs, from 1960-67 when the Nigeria-Biafra war broke out. My older sister was one of the First Ladies in Nigeria in late 90s. Longevity of anything does not mean collateral value. The Bank of America was popular in Nigeria in the 1950s before it became known in US. Nigeria's branch banking regulation is older than that of US because branch banking became entrenched in US in late 1980s, a result of FIRREA – Financial Institutions, Reform Recovery and Enforcement.
Not only do I have intellectual understanding of things, I have political access and do know how government works. US was trading with Sierra Leone long before it did with most other sectors of the world. Read African Squadron and see the stats. Africa suffers from the PCTDD – Post Colonial Traumatic Disorder and Disability, not because she is the only one ever colonized but because Africans whine and use excuses to justify what they are not doing.
Q. The energy sector in Nigeria is owned, managed and controlled by cartels. It's a pity that a country so rich with oil has her citizens running to get power. While it's indisputable that Nigeria is a large exporter of crude, it's not right that the country has to import the refined end-products (gasoline etc) while cheaper options like a portable refinery plants with capacity of 50,000 bpd exist. It's easier to be critical to Nigeria, Kenya or any other African country than fixing the problems. In fact these problems are opportunities that investors are exploiting thus owning Africa economies. Now Kenya may not have everything figured out but at least there is a concerted effort to address the malaise that afflicts its people. Nigeria is also addressing some of its problems. I am particularly impressed by Mr. Dangote’s courage to announce the construction of a new refinery in Nigeria. That is a start on taking the corrupt oil cartel that controls the gas and refined oil sectors. The recent grid redevelopment in Nigeria for $10B is a good start just like the construction of the Thika Highway in Kenya.
Okpa: I am happy you are impressed by Dangote. He runs a monopoly and operates a business model that is unsustainable. As a comparison, the stocks of Dangote companies on Nigeria's Stock Exchange are trading less than those of NBL – Guinness stout beer, one of the highest trading stocks on NSE. No stock on NSE has a dollar equivalent value of $5 per share. You may be impressed by press releases, but I am interested in the valuation of companies, actual data and quantifiable information. Dangote announced that he would build a refinery. That is good for him. But he did not state or disclose how he is going to get the crude. Please research The African Executive and see my piece on Dangote or click here - http://www.africanexecutive.com/modules/magazine/articles.php?article=6113
You are preaching to the choir. Being critical is necessary because it prompts the human being and challenges them to greater heights. Africans easily rest on their oars and laurels, forgetting that nation building is a 24/7 endeavor and accomplishments are history. Everything in life lies ahead. The unknown prompts successful nations to be critical, with the bent: the BEST never REST. Opportunities are everywhere and one does not have to look far.
When a leadership uses excuses and parades degrees, PhDs, MBAs, and other papers, nothing gets done. PHD as in Passion, Hard-work and Dedication are more useful and collateral than PhD, which when an African obtains, thinks the world is their oyster. Nonsense. We must combine all tools including education and nature’s endowed common sense to drive our nations and be willing to compete on the world stage.
If you are impressed in ‘Minors,’ sorry, I play in ‘Majors’ and challenge myself. That is the reason why despite successfully managing US FDIC Central Regional Office – Dallas, Appraisal Department in late 80s to early 90s, as the first black person ever to have such role in less than 4 years coming to US, I left the position to widen and broaden my horizon. Like my father said to me in 1989, he hoped I did not go to America to become a civil servant because I could have done all that in Nigeria. There you have it, fathers/mothers know BEST and mine, was a genius.
Of all the 1,000 biggest global corporations in the world, none is headquartered in Africa. Of all the major financial institutions in the world, none is located in Africa. Of all the top universities in the world, none is located in Africa, but Africa is recorded as having the oldest university in the world, the Timbuktu institution. The first ever presidential library was in Alexandria Egypt, just like Morocco was the first country to recognize US as a nation, and US reciprocated by building her first ever embassy in Tangier. Yet today, African nations act like they are just new inventions.
We have been around. We just don’t know how to play. We are happy being players but hardly imagining becoming referees so we too can call the game: fair or foul.
I rest until provoked by something collateral. I have enviable track records and match my opinions with intellectual prowess without being overly high handed. Running for Mayor of Dallas, was not for show. I ran because I have content. In politics, when there is no WINNING, there is no LOSS either. Having the record as the first native African to run for mayor of a US major city, is no joke. It is a confidence booster plus more. No immigrant in recent history has ran for mayor of a major US city in less than 8 years of becoming a US naturalized citizen. I did in 2003. I am not done. Stay tuned.
Submitted by Ejike E. Okpa.
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