How to Realise the Kenyan Dream — World Bank Economist

Dr Wolfgang Fengler at the Nation Centre in Nairobi last Thursday. Photo/Emma Nzioka

The Kenya of 1990, when outgoing World Bank economist Wolfgang Fengler arrived in Nairobi for the first time and lodged at River Road, has changed considerably.

Dr Fengler arrived at the height of the clamour for democracy, the economy was fast falling into a coma from which it would not emerge until more than a decade later.

Though Dr Fengler, who holds a PhD in economics from Hamburg University in Germany, did not formally begin to work for the Bretton Woods institution in Nairobi — he nevertheless kept track of the changes the country was undergoing over the next two decades.

In 1990, Kenya was a country that did not know cellphone communication. Today, the gadget has become common place even for financial transactions.

The second republic was born with a new Constitution in 2010 that has given hope to many, especially in view of the devolution of power and resources to the counties.

Since 1990, the size of the Kenyan economy has more than quadrupled to $33.6 billion from just $8.6 billion — with most of the increase taking place after 2004. But there has been disappointing news too.

Life expectancy was 59 years in 1990, it now stands at 57 years. Valued added to agricultural production as a percentage of GDP was 30 per cent then, now it stands at 28 per cent.

Dr Fengler’s experience has enabled him to document the country’s successes and failures in a new book titled Realising the Kenyan Dream published by the Nation Media Group.

The book is a collection of articles that he has published in the Saturday Nation in the column Economics for Everyone — Development Discourse which he co-hosts. The book is set to be formally launched on Monday.

One of the major disappointments that is also well documented in the book regards Mombasa port. What the Port of Singapore clears in one week, the Mombasa port takes a whole year to accomplish.

“This should probably be one of the topmost, if not the topmost, priority of the authorities. It is not that Kenya has not been making any reforms, it has not been doing it fast enough. If it continues with the slow pace others might move faster and overtake it,” said Dr Fengler.

Dr Fengler writes about major improvements that have made Asian ports make up nine of the top 10 globally, in turn enabling the continent to get better integrated in world trade.

“Is there any reason why Africa (can) not follow suit and, 20 years from now, make it to the top 10? Mombasa would be a natural candidate but there’s a whole lot of catching up to do,” Dr Fengler writes.

He notes that “to import a container from Singapore, your goods would spend 19 days on the sea (over 7,500 kilometres), but they would need 20 more days just to make it from Mombasa, by road, to Nairobi.”

Again, “bringing a container from Tokyo to Mombasa would cost you less than bringing it from Mombasa to Kampala.” Thus, reforms at the port must go hand in hand with those on the rail and road transport system.

What about agriculture? “Clearly, the story of agriculture is one of the biggest disappointments. But Kenya does not have to be self-sufficient in food production. It can open borders and allow Uganda and Tanzania maize and pay less for it,” says Dr Fengler.

He discusses how high prices of goods and services amount to taxing the poor.

“In the medium-term, a reform of Kenya’s maize sector would help a lot. Kenya’s traditional high-price policy and inefficient marketing systems are hurting the average Kenyan enormously. If Kenyan maize prices came down to international levels, which is in fact what one would expect to see, it would give the poor and the middle class enormous relief,” he writes.

Dr Fengler has been described by some as an Afro-optimist in the sense that he sees a lot of hope for Kenya and Africa in general, that the best times for the continent lie in the future.

“Living in Kenya over the last four years convinced me of the country’s enormous potential. The last decade already gave the country some hope, but the best is yet to come,” says Dr Fengler, who has been on the advisory board of the School of Economics at the University of Nairobi.

Kenya is set to achieve middle income status, which is average income per person of Sh84,000 (or $1,000) annually, by 2016 compared to about $850 currently.

It is likely to reap the demographic and education dividends in the sense that a bigger, more urbanised and educated population will be a boon for the economy going forward, he notes.

Lived on three continents

Dr Fengler has covered Kenya, Rwanda, and Eritrea. He joined the World Bank 13 years ago and has lived on three continents — in America working at the bank’s headquarters in Washington, in Asia as a senior economist in the Indonesia office, and in Africa based in the Nairobi office.

Several opinion and business leaders have commented on the book’s style.

“Wolfgang has an exciting and innovative way of looking at the dynamics of development in East Africa… Wolfgang is an Afro-optimist and I know of many leaders who wait for his wisdom, analysis and ideas every week,” says Mr Vimal Shah, the CEO of Bidco and former chairman of the Kenya Association of Manufacturers.

“In his writings, Wolfgang has succeeded in simplifying complex theories of development economics for ordinary readers while at the same time raising the curiosity of academics. He often gives a comparative picture of country data with similar economic status.

“Some of us in policy making have used his comparatives to revise policy and take corrective action,” said Ministry of Information and Communications Permanent Secretary Bitange Ndemo.

girungu@ke.nationmedia.com