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Even with electoral skulduggery, Kenya elections are region’s star by Charles Onyango-Obbo

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Kenya goes to the polls this week, keeping up East Africa’s election-rich run.

In 2020 both Burundi and Tanzania had general elections. In 2021 it was Uganda’s turn. In 2023, South Sudan and the Democratic Republic of Congo will go to the polls. In 2024 it will be Rwanda’s turn, and in 2025 Tanzania’s.

There are some good things about having this spread.

Given the violence that tends to mar most of the region’s elections, foreigners and East African citizens nervous about election chaos will always have a safe place to run to next door, which is not holding a vote.

Additionally, it allows East Africans who like to compare their countries to focus on one election at a time and praise or jeer it. In 2021 Kenyans had a feast as Uganda’s election was marked by state violence, arrests, and torment of the opposition. Ugandans, especially ruling party supporters, are most definitely waiting to take revenge.

But many of them, mostly opposition supporters, are also already holding up President Uhuru Kenyatta’s farewell. They laud the fact that Kenyan prisons are not full of opposition supporters nor have candidates been beaten, or blocked from freely campaigning, to mock the more perilous political conditions at home, and draw contrasts with President Yoweri Museveni’s record-breaking nearly 37-year rule.

The significance of Kenya’s vote is larger, though. Kenya’s elections have been corruption-riddled, cynical, marred with irregularities, and in the past have been riven by ethnic animosity and violence. What sets them apart from nearly all the rest of the East African elections is that even with all those drawbacks, they have tremendous redemptive and pedagogic value.

The playing ground in Kenya elections is fairly even. And the outcomes tell us a lot about what happens when a minimum level ground is achieved in Africa. Presidential candidates face little to no state-repressive obstacles in their quest for the top job. Secondly, there is never a far-out early favourite in Kenyan elections, and the sitting president starts out with the least incumbency advantage of any East African country.

Even with electoral skulduggery, the final result is usually close. The biggest margin of the country’s democratic era was in 2002, when Mwai Kibaki beat Uhuru Kenyatta, winning 63 percent of the vote.

In the disastrous 2007 election, he beat out Raila Odinga by just over 200,000 votes, the closest race in Kenya’s history. In 2013 President Kenyatta beat Raila with 50.07 percent of the vote, just a nose over the 50 percent needed to win. In 2017 he won by 54.3 percent of the votes, ahead of Raila Odinga with 44.7 percent. The Supreme Court threw out the result.

This country cobbles together the most complex election coalitions, which often quickly die off after victory — or defeat. And it has had parliamentary and presidential power changing to different parties and coalitions at the vote than the rest of East Africa combined.

This does not necessarily make Kenya an East African democracy model. But when it comes to teaching how to negotiate, make deals, and divvy power through the vote in an ethnically and culturally diverse nation, it’s a Grand Master.

Strictly Personal

Paradox of foreign poll observers in Kenya who see evil back home by Jenerali Ulimwengu

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“When the hurly burly is done/ when the battle is lost and won.’’

This famous line in Shakespeareana was going through my mind as I watched and watched the poll results trickling in ever so slowly on Kenyan television screens, tracing the seesaw progress of the two leading presidential contenders this past week down to the photo finish.

The calm manner in which the collating of the results was done, despite all the cliffhanging and nail-biting, gave me hope throughout that this time around we were going to get to the end of this journey unscathed.

Of course, once bitten twice shy, and we always have reason to believe that what can go wrong will go wrong. Once, we have seen Kenyan election results thrown out by the law courts, and once, infamously, we saw Kenyans jumping onto each other’s throats, pushing their nation to the brink, literally.

Upward trajectory

I believe that what the Kenyans have shown us is that they becoming a learning people. Having gone to the precipice in 2007 and having experienced serious hiccups later, they have learnt their lessons, decided to cure their shortcomings and moved along on an upward trajectory. They have clearly refused to do the same thing the same way over and over again, expecting different results, the proverbial signs of insanity.

So, those who went to observe the elections were treated to a more serene scene than those I allude to above. They were looking at a people that is beginning to appreciate that elections need not be bloody battles, even though they be highly competitive, sometimes aggressive and bruising.

I thus commend the Kenyan people for showing us this face of their country, which tells me that it is possible to do politics in a civil manner.

Significantly, they have also shown us that time-hallowed stereotypes need not always be taken into consideration in the shifting political sands of Kenya: that a leader from Mount Kenya could embrace one from Nyanza and champion his electoral campaign was almost an impossibility only the other day.

Whatever else may have been lost in this election, that is a plus, a huge one. Now, we can expect the two communities to concentrate on what the Kenyans do best, and that is turn this ethnic détente into economic synergies allowing their young men and women to organise themselves together in the creation of wealth with the aim of heaving their communities out of the abyss of poverty and backwardness.

Let us face it, the only political messages that are worth looking at are those that aim at improving the lot of the people we claim to represent, to make their lives better, to seek to be inclusive in our programmes and to care for the least advantaged, seeking to achieve economic and social justice, the only basis for realistic peace.

I am a realist, and I of course never lose my focus on the fact that politicians will always lie, because that is the lot of them. Lying is to politicians what eating meat is to lions; they simply cannot help themselves.

What is required of them is that they do not destroy the habitat I which we all live.

Good one

As I pondered all that, I was naturally following on what the election observers from outside Kenya were doing and saying. I think that the practice of having election observers is a good one and which should be encouraged and enhanced.

Still, we could do it better by choosing who gets to be an observer. These should be people who have credentials showing they have practised observation in their own countries, and they should have shown that in observing elections in their countries they have proved their credibility and honesty.

For instance, if you want individuals to observe good footballing practices, you want to pick those who have practised football where they come from. It does not help matters if those who come to observe such activities have no idea of the offside rule or the difference between a corner kick and a penalty.

It is with this understanding that I would like to ask whether there was any justification for having Tanzanian observers in the observer teams for the Kenya elections, whatever regional organisation they were representing. When did they last have an election that even a casual onlooker could have recognised as credible, free and fair. When?

Nemo dat

There is a legal phrase in Latin: “Nemo dat quod non habet (you cannot give what you do not have).” It is usually used when deciding whether a proprietary right has been passed on to the current holder. But it can be used in situations where credibility is vouchsafed by someone whose own credibility is doubtful.

If in your own country you have not been able, or been willing, to observe and speak out against what is wrong, how can you now presume to observe and say anything at all in other countries?

Let me be fair: It was not Tanzania alone. I also saw a former Ethiopian president among the observers, and I was wondering about the same thing.

Nemo dat!

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Strictly Personal

Euro-Dollar Fluctuations: Is the Moroccan Dirham a Victim of Imported Inflation? By Hachimi Alaoui

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The global economy is witnessing an unprecedented motion in the value of the euro, as its exchange rate has reached levels not seen since the early years of its existence as Europe’s common currency. After a prolonged depreciation in the euro’s value, the euro/dollar exchange rate has almost reached parity.

It happened faster than expected, and the movement of the exchange rate between these two currencies has been non linear. The euro’s fall below parity against the dollar, however, merely reflects a widening gap in the interest rates between the two shores of the Atlantic. While the Federal Reserve has implemented aggressive interest rate hikes to curb inflation, the European Central Bank continues to opt for a more cautious monetary policy approach.

As a result, a significant interest rate difference between the Euro-Zone and the US, which has sparked larger capital inflows to the US and massive purchase of the dollars, as the dollar has become more attractive to investors.

The latest reforms are not enough

In a global context, however, let’s not forget that the Moroccan dirham is pegged to an anchor basket of these two currencies that reflect the relative weight of our trading partners. In 2015, Bank Al-Maghrib (BAM), Morocco’s central bank, and the Moroccan Ministry of Economy and Finance updated“ the Dirham’s basket weighting to reflect the current structure of foreign trade of our country.”

Under the updated basket, the Moroccan currency’s basket weighting is “set at 60% for the Euro and 40% for the US dollar,” notes the website of the finance ministry. But this range limits the ability of Bank Al-Maghrib to maintain the dirham around a predetermined central value.

The range has only been widened twice, in January 2018 and then in March 2020. In January, 2018, after years of a (+-) 0.3% range around the reference price, the dirham exchange rate began to evolve to a wider band of (+-)2.5%. The outbreak of the COVID-19 pandemic in March 2020 then prompted Moroccan monetary authorities to further widen the fluctuation range of the nominal effective exchange rate, thus increasing to (+-) 5% around a central value.

Despite this progressive process concerning the exchange rate’s flexibility, the fluctuations of the dirham bring out a basket effect that continues to dominate the liquidity effect of market drivers. The basket effect comes from the impact of the fluctuation of the euro/dollar exchange rate on the dirham, and the difference between this impact and the evolution of the reference price of the dirham is equal to the market effect.

While the dirham would appreciate against the dollar and depreciate relative to the euro when the euro/dollar exchange rate appreciates, it would depreciate against the dollar and appreciate against the euro, when the euro/dollar depreciates.

The Moroccan exchange rate regime thus allows the current appreciation of the dollar/euro to appreciate the dollar/dirham and depreciate the euro/dirham rates. Nevertheless, these fluctuating values of the dirham occur at the expense of Morocco’s foreign exchange reserves, which remain the primary buffer against external shocks.

Making the Dirham more resilient to external shocks

Given the dirham’s vulnerability to the relative values of the euro and dollar, switching Morocco’s monetary policy towards adopting a targeted inflation rate, announced by Bank Al-Maghrib, could lead to a stronger market effect. Such a monetary policy framework can be implemented with a floating, or at least, a more flexible, exchange rate.

However, this transition would amplify the exchange passthrough to inflation, defined as the degree to which Morocco’s domestic prices react to a fluctuating value of the dirham, and induce persistent supply shocks, namely cost-push shocks. Nevertheless, more market discipline would follow and the exchange rate, rather than international reserves, would serve as the main shock buffer.

The redesign of Morocco’s monetary policy framework becomes even more critical in the face of the increase of oil prices. Morocco has long benefited from a negative correlation between oil prices and the US Dollar. The resulting compensatory effect made it possible to mitigate, albeit partially, the increase in the energy bill paid in dollars.

But this compensatory effect has faded in recent months due to the  rise in the value of the dollar against the dirham, combined with a staggering increase in the cost of energy inputs. Taken together, these two outcomes have amplified the inflationary pressures that households are experiencing, negatively affecting the Moroccan economy.

Under such conditions, Bank Al-Maghrib will need to provide more support to the dirham at the detriment of foreign exchange reserves. However, current fixed-exchange rate behavior fails to support the Moroccan economy. By strengthening the foreign value of the Moroccan currency, the country maintains the same level of inefficient domestic absorption, which in turn leads to supporting harmful consumption of energy and the bad habit of using imported goods.

Moroccan households currently face a volatile exchange rate and energy shocks. And rather than consuming our foreign reserves to maintain the same rate of energy utilization, an awareness of our consumption habits is probably more suitable. The fact is that pegging the dirham requires selling central bank’s reserves whenever there is an exchange rate pressure that generates costs associated with the continued use of foreign reserves as an external shocks absorber.

On the whole, the support that Bank Al-Maghrib provides to the dirham helps maintain relatively high levels of an unfavorable and unproductive use of energy and raw materials. If these imported inputs are expensive and hinder economic growth, Moroccans need to be informed.

Greater flexibility of the dirham and the resulting depreciation of its exchange rate would reduce domestic energy consumption, whereas a fixed exchange rate simply fails to readjust our consumption habits.

 

 

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