By Abdi Mohamed Golo:
Rent-seeking involves seeking to increase one’s share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through poor allocation of resources, reduced actual wealth creation, lost government revenue, increased income inequality, and (potentially) national decline.
Kenya is becoming a “rent-seeking” nation in which the politically connected make easy money without having to work for it: they get government and private sector contracts, jobs and favorable policies just because of their closeness to those in power. More to this is also inform of political pay backs to allies and cronies who are non-performers in public domain.
Although rent-seeking may, for many, appear not to be corruption, it is also pervasive form of it. The entrenchment of a rent-seeking culture undermines the productive capacity of the economy, as well as innovation and new investment. It discourages job creation and efforts to reduce poverty and inequality. It ultimately stymies economic growth.
An obvious form of Rent-seeking includes appointing politically connected persons in both the public and private sectors, or giving them government or private contracts (both at county and national governments), when they do not have the competence. Rent-seeking also involves lobbying for policies that enrich one group, company or political faction rather than the whole society. This is the reality happening in the counties and national governments.
Such activities have generated more of the same, until there is a widespread culture of rent-seeking. If no action is taken against this, more people are attracted to such actions. Rent-seeking can generate a network of institutions and people that profit handsomely from the county and national government.
Before devolution, people would hear of corruption and lack the access to these powerful people. For instance, an MP would embezzle CDF but you would hardly meet him during his or her tenure in office as they would be in Nairobi until the next elections.
However today, things are different. The Governors, County Executives and MCA’s are our neighbors and friends. These are people we saw when they had very little or nothing. Their salaries and allowances are public knowledge and does not commensurate with the task.. Many still live in their homes, except those who come from far and live in the headquarters of the respective counties, but still visit home frequently and some have massive wealth and assets in various places.
We will hardly have the opportunity to test or know where they got the monies from. For instance, we would need records of bank accounts and signed documents to ascertain the money trail.
However today in some counties, certain MCA’s call themselves Engineer, yet they lack even a form four or college certificates. This is because, they collude with county executive members and are given roads contracts. When these goodies are scarce or they are not given, they team up to impeach a certain county executive or governors the evidence of all these will not be from legal documents which are hard to find.
Rent-seeking kills economic growth
Rent-seeking and political brokers kills the economy, there is no long-term investment. The rent-seekers try to “eat” as much as quickly as possible to amass wealth, before being pushed from the trough by the next dominant group/party in election and unfortunately this is the culture in Kenya today. It’s our time to eat with tribal politics and alignments.
Because it is so easy for the politically connected to live off “rents”, they are unlikely to have the incentive to build the economy in any way. Rent-seeking kills the economy. The economy does not expand its productive capacity when rent-seekers milk existing capacity, choking less connected innovators and entrepreneurs who fail to get start-up finance, fair play ground or trading licenses leave.
Giving government contracts and jobs to the politically connected often means that services get more expensive and the economy dwindles down the drain with corruption.
Theft of innovative ideas and opportunities
A new phenomenon increasingly reported is that politically connected with corrupt businesspeople, in cahoots with corrupt government tender officials, steal the business plans submitted by entrepreneurs who are not politically connected, rework them slightly and then resubmit them to the same corrupt officials with successful outcomes and this often happens in all levels of governments.
Well-connected political deployees to government who lack the necessary competence push out talented potential incumbents. We often see the same people being appointed to senior positions, such as director of state cooperation’s, diplomats, commissioners, and, in different departments, or as executives and board members at state-owned cooperation’s, even when they fail and collapse this organizations. They hop from one post to another, even if there are many talented young professionals out there because of the political connections.
Incompetent public sector deployees often cause waste, mismanagement and inefficiencies. Service delivery gets stunted and a negative cycle of corruption, nepotism and mismanagement ensues. They demoralize those working under them, decrease their productivity and undermine the whole system.
Both the national and County Government in their current form is laden with work force selected through mediocrity that are largely inept and inefficient who cannot produce the required budget and invite public participation as required by law. There is conspicuous manifestation of massive corruption and other forms of bad governance.
Rent-seeking is increasingly causing resentment – from young people, who cannot find a job without political connections, from business and from young brilliant professionals who get frozen out.
Hard working citizens workers are also rebelling because they have not been empowered by skills development, shareholding and social development,. Residents are angry because they are excluded.
Taking the easy way out will backfire in the end
Rent-seeking stunts the productivity of the whole economy: why does one have to work hard when all one needs is to be politically connected? And with Massive corruption you make millions .From the MCA up to the national government.
This rent-seeking phenomenon has broken the economies of most African countries in the postcolonial period. The cycle of rent-seeking, it seems, can only be broken if the sitting government is unseated or change of strategy vis vis.
So far, no African government that has lapsed into a rent-seeking culture has been able to reform from within. As Kenyans if we are in this trend, there has to be a grass-roots campaign against corruption: the masses must understand its damaging impact on service delivery, poverty alleviation and job creation.
In my opinion Dominion effect is defined as a cumulative effect of one even which set off a chain of similar events. Therefore the dominion effect of bad governance is increased poverty, unemployment and social unrest. The most significant indicator of the existence of bad governance is corruption. There are many counties whose governors have been summoned by the house of senate to answer charge of impropriety emanating from reports from the Auditors General and the controller of budget of the County Government which is a significant manifestation of existing corruption in the county.
Conclusively In this regard, history has been very cruel to leaders to perform below the expectation of the people. James Buchanan one of the former American presidents, the man regarded by many historians as the worst president in American history. He was elected president in 1856 and did not seek for re-election in 1860. He was preceded by Abraham Lincoln and he reportedly told Lincoln “If you are happy entering the presidency as I am leaving it, then you are very happy man” So what did Buchanan do to earn the disrespect of many people? His apparent indifference to the onset of the American civil war and the resultant economic recession that followed riled up so many people. Just before his death in 1868 he said “History will vindicate my memory from every unjust aspersion” In fact history did not vindicate him. Buchanan has been ranked among the three worst presidents in America in every poll and survey conducted since 1948.
The leadership of the national and county government shares with Buchannan, the attitude of indifference to the suffering of the poor and underprivileged of people of counties and misplaced arrogance displayed by both county and national government. My question is how many more Buchanan is in the making in both county and national government?
My final take is also Economy is dwindling in Kenya and the government should stop burying its head in the sand and should start cracking the whip on all inefficient rent seeker in both county and national government. The economy is not sustainable anymore and the effect is we shall always be borrowing to pluck the leaks but for how long and what will be the economy afterwards. “If we are not careful, managing our finances poorly will be the landmine waiting to explode and hit hard in Kenya soon.”
Abdi Mohamed Golo is a Nepjournal contributor and lives in Toronto Canada. He can be reached on Moha2002za@yahoo.com