Political Economy Analysis of Kenya

Kenya is strategically located in the East African region. It is of geographical and economic importance on this region. The most notable fact about Kenya is that it has remained relatively stable since her independence in 1963, despite sharing borders with politically unstable countries like Somalia and Sudan. It has therefore been the main hub for transportation, trade, finance and communication in the region.  However, the country has seen her fair share of trouble struggling to contain the levels of poverty, inequality and corruption. The height of inequality and impunity in this country was witnessed by the violent events that followed the disputed 2007 presidential elections.  These events brought into perspective the ethnic strife that has silently engulfed the country over years, and that of social classes. The events of 2007 and early 2008 tested the political stability of Kenya and the result was talks that led to the promulgation of a new constitution in 2010.

On the other hand, Somalia is coastal country that has witnessed political instability for over two decades. Somalia’s instability is mainly seen to be as a result of a scramble by the country’s many warlords to assume control of the country’s main source of revenue. The scramble has led to the rise of rebel groups such as the Islamic Court Union (ICU) and the al-Shabaab militia. The instability created by the activities of these rebel groups has caused the county to be without a central government for over twenty years. This has worsened the drought situation in the country to a famine level and practically stunted political-economic development. This has seen many Somali citizens cross the border to neighboring countries to conduct business or become refugees.

The situation in Ethiopia is that of a stable government which is however oppressive to the minority. The country has been a one-party state for a very long time. In deed, the Prime Minister Meles Zenawi has been in power since 1991. A certain degree of corruption and the oppressive rule in this country has greatly curtailed the development of political economy and blocked the achievement of economic goals.

This study therefore aims at establishing the effects of corruption on the political-economic development of Kenya, Ethiopia and Somalia thorough a quantitative survey, and thereby come up with possible strategies that these countries can adopt so as to better achieve their goals.  

1.2: Statement of the Problem

Kenya, Somalia, and Ethiopia are three neighboring countries in the eastern Africa region. With the increasing preference of countries to form regional economic blocks, like the East African Commission (EAC) that Kenya is trying to establish with Uganda and Tanzania, it is inevitable that the political-economic situation of any one of these countries will affect the other.  This will also affect the general growth of the region economically.

Unfortunately, the region has witnessed repeated cases of conflict and instability. With the exception of Kenya and Ethiopia, Somalia has had a particularly unstable political environment, thereby hurting political-economic development. This is demonstrated by the large number of Somali citizens that have crossed the borders to Kenya or Ethiopia either as refugees or to conduct business.

The possibility of the citizens of these three countries to conduct business together means that market factors should be checked so that stronger economies in the region (like Kenya’s) are not liquidated and the weaker economies (like Somalia’s) are not made even weaker6. The most important market factor is to remain true to the forces of demand and supplies without manipulating them through corrupt dealings.

As observed in the introduction, these three countries are ranked among the most corrupt in the world by the annual Transparency International’s Corruption Perceptions Index. To be able to acquire effective political-economic development, this trend has to be reversed and policies put in place to curb cases of corruption and encourage legitimate ways of conducting business, equipment of institutions, and following the rule of law.

This study, therefore, aims at establishing how the high cases of corruption in the three countries and the region at large are affecting the political-economic development of the region and the attainment of socio-economic goals like the Vision 2030 that has been set into perspective by the Kenyan government. The study also aims to use these findings to suggest possible remedies or strategies to adopt in order to get rid of corruption from the region or significantly reduce it.     

1.3: Research Questions

This study is looking at the corruption situation in there countries of study and is therefore geared towards answering the following questions:

  1. What is the corruption status of these three countries on the world scale as compared to other countries in the region?
  2. What are the possible causes of corruption in each of these countries?
  3. How is the level of corruption affecting the political-economic development of the nations and the region at large?
  4. What are the possible remedies to corruption situation in these three countries, in order to create a concussive environment for the achievement of the set economic and political goals?

1.4: Statement of Thesis     

Due to the continuous ranking of these three countries among the most corrupt nations in the world, and their apparent underdeveloped political-economic scope, it is inevitable to establish the levels of corruption to the political-economic development the countries and the region as a whole. The thesis for this study would therefore state that there is a direct correlation between high levels of corruption and the underdevelopment and achievement of a country’s political-economic goals.

2.0: Literature Review

2.1: Introduction

The subject of corruption is a common one, especially when talking about the economic and political development of African countries. To establish the facts about corruption and political-economic development situation of the three countries, an extensive literature review is carried out. 

2.2: Review of Related Literature

A Survey conducted by Kempe Ronald Hope, Sr. to assess the political economy of development in Kenya in 2010 demonstrated how Kenya has developed socio-economically, from a political point of view.  Among the most important developments Kenya has achieved are the transition of power from the centralized government to devolved government, and the clear separation of powers. To help bring this view out, it is vital to analyze the fundamental issues such as the economic growth, corruption, and reforms. Though corruption can be traced in nearly all countries all over the world, it is a particularly daunting problem in Kenya. Statistics show that an average urban dweller has to give out 16 handouts in a single month just to get his regular affairs running. The most fascinating thing about corruption in Kenya is that it is not limited to the large corporation environments. Rather, the population at the low-level has perfected the art forcing an average Kenyan urban dweller to pay out up to 16 bribes a moth, just in the course of his daily activities. It is widely believed that the rampant corruption in Kenya is largely due to the Kenyans’ loyalty to their respective tribes. This loyalty causes public officials to ‘help’ their tribes’ men foremost, even if it means being involved in illegal recruitments and corruption. The tribal influence on corruption has however been observed to be on the decline in the recent times but historically, its influence can be tracked by looking at the policies adopted by the three presidents Kenya has had since independence, during their tenure. 

The 2008 Corruption Perception Index by Transparency International Kenya was ranked 147th out of 180 countries. To compare, the number 1 country, meaning the least corrupt, was Denmark while the most corrupt country (number 180), according to this annual report issued by Transparency International was Somalia. Ethiopia was ranked by this survey at number 122. This survey is carried out on annual basis and countries are ranked based on their economic developments and their ability to create free markets and investment environment without hindrances.

Somalia has repeatedly been cited by this annual CPI as the most corrupt nation out of the three and in the world as a whole. Being a coastal state that majorly relies on shipping trade for its revenue, Somalia has experienced scrambles by various powerbrokers over the control of the main source of revenue- the Kismayu port. This has led to continuous strife in the country with various factions of warlords rising to try to take control. As such, the country has lacked a central government for decades. Corruption has also been widely blamed for the widespread famine situation in the country. Critics say that the drought in Somalia could be easily managed if the regime did not channel its resources to fighting each other. In deed, Somalia was ranked 144th in the 2005 CPI report, behind Liberia, who was ranked 137th. Somalia by this time shared a lot of features with Liberia, including a collapsed state, warlordsm, and self-centered leadership. However, Liberia seems to have recovered while Somalia fell into deeper abyss as far as corruption was concerned. This was demonstrated by the 2009 CPI report that placed Liberia at number 97 and Somalia 180th .  

Another survey about the political-economic evolution of Kenya over the years of the different administrations was carried out by Okumu in 2008. He observes that Colonialism was characterized by forceful acquisition of land from the natives by the colonial masters and white settlers4. Most of the fertile land had been taken from the Kalenjins, among other tribes. However, when Kenya attained her independence and the white settlers left, President Jomo Kenyatta did not return this land to the kalenjins. Instead, he handed them over to members of his own Kikuyu tribe, who were loyal to him. He himself is to date considered one of the largest private land owners in the country and the region. 

Corruption was on the rise during the tenure of President Daniel Arap Moi. A lot of times, he himself was directly involved in the corrupt dealings. In deed, he is adversely mentioned in one of the biggest scandals of the 1990s in the country- the Goldenberg scandal4. Despite all the effort that has been put in place to investigate the scandal, few of the suspects had been tried by the end of 2008. This is indicative of the continuing problem of corruption in the country.

President Mwai Kibaki came into power in 2002 with the promise to curtail the problem of corruption once and for all. This regime is attributed with achievements such as the introduction of Free and Compulsory Primary Education, Media Freedom, and democratic elections. However, the regime’s administration is widely made up of the president’s Kikuyu tribes men. There have been cases of the members of parliament taking large allowances that were not legally part of their official compensation. Perhaps the most notable misdoing on the part of the president himself was observed in the purposed falsification of the presidential results in 2007 that led to widespread violence across the county.    

A UN survey conducted by Medani in 2000 established that the absence of a central government in Somalia, due to civil strife and scramble for resources, has allowed for external influences from countries such as Ethiopia, Yemen, Eritrea, Djibouti, Egypt, and Libya. These countries have on various occasions supported various Somali factions and transitional governments. One such occasion is when the Ethiopian forces invaded the country, in July 2006, and fought the Islamic Courts Union (ICU). They withdrew completely in January 2009, having defeated the ICU. However, the military wing of the courts reorganized in to a terror group called al-Shabaab, and launched multi-factional insurgence.

The author argues that the rise of the al-Shabaab militia group has complicated matters for Somalia. There has been a rise in cases of piracy, which has widely been seen as the militia’s attempts to mobilize funds to finance its operations. Reports dated as back as 2008 show that the number of annual attacks by the pirates has increased to hundreds and has spread to coasts way outside the Somali territory like the Omani gulf and western Indian Ocean. Attempts have been made by various bodies and/or countries to try to reverse the situation in Somalia. The UN Security Council, for example, established the Contact Group on Piracy off the Coast of Somalia in January 2009 and authorized nations to use all the means available to them to stop the acts of piracy in Somalia.

The same survey helps to establish facts about Ethiopia saying that it is not among the countries that underwent European colonization of the 19th and 20th century. It is therefore the oldest independent state in Africa. Despite this fact, it has not fully transformed into a democratic state and has for a long time been a one party state.  This has seen Prime Minister Meles Zenawi rule the country since 1991.  Ethiopia is however trying to move towards a multiparty democracy but the obstacles are still there. The obstacles have been orchestrated by the government especially as demonstrated in the crackdown of protestors after the 2005 elections. The prime minister also won the May 2010 elections by a landslide, despite low ratings by the public, as demonstrated by opinion polls.

Despite the seemingly tyrant leadership, Ethiopia has had a relatively lower rate of corruption in the region. Its ratings are however still among the highest in the world. In 2010, it was ranked by the CPI report at number 116 out of 178 countries6. This was an improvement fro the previous years ranking at number 120. The grip that the government has placed on the economy has stunted growth. This has seen even state-run banks become uncompetitive and cannot be compared to private banks in the neighboring countries like Kenya. Her economic freedom scored 50.5 as per the 2011 index, making it the 144th freest economy in the world6. The overall GDP is mainly based on agriculture, which forms 40% of GDP and employs 76% of the population.

3.0: Methodology

This is a quantitative study that uses quantitative data from secondary sources to affirm the facts about the economic and political situations of the countries of study. A correlation is drawn between the level of political and economic development of these countries and the level of corruption in these countries. Data is obtained from the statistical data bases and findings presented in charts and graphs for ease of analysis. The data will encompass the trends of governance, corruption, per capita earnings, domestic expenditures, and political achievements of the respective countries.  Data is collected of the political and econo0mical events in the three countries over a span of six years, starting from 2005 to 2010.

Analysis is based on numbers and is therefore quantitative and tries to relate all the variables of the study as the cause or effect of the other(s). The analysis is also systematic dealing with each research question (variable) as an entity, taking care in the process to relate the findings of the various research questions so as to be able to accept or reject the thesis.  

4.0: Analysis of Findings

GDP (PPP) achievement of Kenya in the period running from 2005 to 2010 is as shown in the table and graph in figure 1 below:

The graph shows a gradual rise of GDP over the years. This is indicative of the growing economic capacity and market freedom, thereby attracting investments. To help demonstrate the political status of the country that could have contributed to these outcomes in GDP, this analysis compares the countries Transparency International’s CPI rankings over the same period.  

This graph demonstrates a relatively stable state of the corruption index at 2.1 throughout the period with the exception of the year 2007, where there is a slight increase in the CPI to 2.2. This has got Kenya ranked at number 154 in the world, on average. This means that the gradual increase in the country’s GDP over the years might be due to some other factors like improve technologies and marketability rather than improved governance.

The situation in Ethiopia is such that the real growth in its GDP has been increasing over the years. This growth peaks in 2008 at 11.6 but later starts to dwindle as seen in 2009 and 2010 which recorded 8.7 and 8.0 growth rates respectively.

To help demonstrate whether the country’s corruption status over the years contributed to these economic outcomes, a chart demonstrating the Transparency International CPI rankings over the save period of time is considered.

The CPI of Ethiopia stars at a high point in 2005 but gradually reduces over the years. However, the CPI starts to increase after 2008 and peaks in 2010 at 2.76. This has got Ethiopia ranked number 116 in the world. Ethiopia’s case is a moderate example of how the corruption status of a country impacts on the economic growth of the country since the peak CPI in 2010 coincide with the least GDP growth in the same year. This finding is however awkward because the reverse should be true. Therefore, it is possible that other factors, rather than just the corruption status of the country, were involved.

The situation in Somalia should probably serve as the model for this study. The country’s unstable political environment has ensured that it has maintained a low rate of GDP growth over the period of 2005 to 2009. This falls to a lower rate in 2010 probably due to the menace of the al Shabaab militia group1. This finding is represented in the table and graph below:

To help demonstrate whether the country’s corruption status over the years contributed to these economic outcomes, a chart demonstrating the Transparency International CPI rankings over the save period of time is considered.

This graph demonstrates the instability experienced in Somalia through the Transparency International’s annual CPI projections. The country has maintained very low scores of CPI over the years that have seen it being ranked the most corrupt in the world on average. However, this instability in the CPI ranking is not directly attributable to GDP performance of the country as the events of every individual year cannot be effectively compared by these two figures.

The finding in the individual countries means that the hypothesis that states that high cases of corruption in the three countries and the region at large are affecting the political-economic development of the region and the attainment of socio-economic goals is rejected. This is because there cannot be established the relationship between the Corruption Perception Index and GDP growth of the countries. As much as it could be theoretically viable to state that the two are intertwined, the figures did not show a definite correlation and therefore cannot be used to establish the relationship between the two.

However, a comparison of the countries GDP-Real Growth over the same period seem to agree with their respective overall ranking by the annual CPI reports with Ethiopia, ranked 116th  , having a higher real GDP growth and Somalia, ranked 178th, having the least real GDP growth.

5.0: Conclusion

Kenya, Ethiopia, and Somalia are in falls within the same Eastern Africa region. As such, it is expected that they are almost affected by the same factors that model their economies like availability of resources, market freedom, and investment capacity among others. This might theoretically be the case but a more important factor makes sure that there is variation in the economic developments of the countries. This factor is political stability of the nations.

Determinants of political stability are national security, equality in society and levels of corruption in the countries. All the three counties are ranked very low in the world by the annual Transparency International CPI reports and this could correctly be predicting the lower GDP achievements of the three countries as compared to the world average. However, the CPI scores by individual countries do not show a direct correlation with GDP achievements making it impossible to compare the effect of one on the other.

This has an implication that the economic growth is influenced by other factors besides the levels of Corruption in these countries. The most probable of these factors may be; political stability and levels of security in the countries.

Future research in this field should therefore consider these other factors of political and economic development in the countries and involve a greater number of countries so as to reveal the consistency and reliability of the collected data.   

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