A Historical Political Economy of Kenya
A high-achiever country repeatedly let down by mediocre leadership
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This is the final installment in a four part series to mark the first anniversary of the June 25, 2024 protests. It offers a general commentary on how the current moment fits within the wider historical political economy of Kenya.
The first post discussed the state of the Kenyan economy under President William Ruto. The second post argued that despite his ongoing political troubles President Ruto still has a good shot at reelection in 2027. The third post speculates on how Ruto might lose in 2027, incumbency advantage notwithstanding. For background, be sure to read the four pieces from last year in the aftermath of the protests here, here, here, and here.
I: Falling behind where it really matters
This post places Kenya’s economic stagnation over the last two decades — which is partially responsible for recent street protests — in historical perspective. It then outlines a potential pathway out of the current malaise and towards modernizing economic growth and development. The overall thesis of the piece is that Kenya’s current predicament is structural, and therefore much bigger than the specific failures of the current administration.
But before that, it’s worth taking a look at an important indicator of Kenya’s recent developmental stagnation.
In the early 1980s life expectancy in Kenya was almost a full decade longer than in Tanzania and 15 years longer than in Uganda. Since then the figures have been reversed. These days Tanzanians live over 3 years longer and Ugandans almost 5 years longer than Kenyans. Despite their enduring human capital challenges, Tanzania and Uganda caught up and surpassed Kenya on this important measure of human development (see previous post noted Tanzania’s advantages in the race to be the Gateway into East and Central Africa). While some other data sources show the two countries merely catching up to Kenya, the unmistakeable fact is that gains in life expectancy in Kenya have decelerated for the better part of a decade. Importantly, the deceleration preceded the COVID pandemic.
What explains the trends in Kenyan life expectancy compared to its East African Community neighbors? There are two leading explanations: urbanization and spatial unevenness in economic development.
A truism in the literature is that urbanization is good for human development. At least since the mid 20th century, the magic of agglomeration economies has meant that urban dwellers tend to engage in higher-productivity non-agriculture sectors, have better access to health and education services, live longer, and generally have better life outcomes. However, the data from African countries increasingly paint a picture that is counter to this narrative. In a number of countries, including Kenya and Tanzania, urban dwellers now have a lower life expectancy than their counterparts in rural areas — similar to what obtained in urbanizing high-income countries before the germ theory of disease, modern medicine, and modern water and sanitation systems.
To be blunt, the thoroughly disorganized squalor that is common in many African cities (often right next to high-income areas) imposes a heavy disease burden and depresses urbanites’ life expectancy. It follows that, just like in other contexts, the construction of modern urban water and sanitation systems (not standalone “community” projects) as well as improvements to lived environments ought to attract significant investments from those interested in boosting life expectancy and general human welfare in the region.
It’s hard to overstate the need for modern water and sanitation systems, among other interventions to improve the lived environment across the Continent. About 40% of deaths in African countries are the result of preventable communicable diseases, maternal and perinatal conditions, and poor nutrition. To reiterate, the sort of urbanization happening in the region — characterized by extremely unsanitary lived environments for the majority of urbanites (including in many high-income areas) —will only turbocharge these problems.
Approaching public health from the perspective of medicine is definitely important. Modern medicine is a glorious miracle! Yet it is just as important to pay close attention to other factors that have historically contributed to reducing mortality rates and improving health outcomes across the board:
The bottom line is that sanitation—pest control, water filtration and chlorination, safe sewage disposal, milk pasteurization and other food safety, and public education about general hygiene—probably did more than anything else to reduce mortality rates, if only because these techniques were available decades, and in some cases centuries, before anything else. Antibiotics were dramatically effective when they were finally introduced, but by this point a lot of the work had already been done. Vaccines too were extremely effective, but merely delivered the coup de grace for many diseases. Other techniques, while very important in limited spheres, simply addressed problems that were too small to show up on any of the top lists.
African states can’t leapfrog basic sanitation and improvements to lived environments. Which is why we need more serious thinking regarding the problem of African urbanization at much lower levels of income and individual-level productivity. What are potential solutions to the fact that urbanization in the region yields low-productivity consumption cities that can’t afford basic amenities (water & sanitation, housing, clean cooking, etc) that link urbanization with better life outcomes:
The new metropolises of the world are being built in sub-Saharan Africa, South Asia, and South East Asia. However, the mechanism that seems to have driven urbanization in much of the rest of the world—the decline of labor productivity in agriculture relative to manufacturing—may not always be at work. In some regions of the developing world, and in sub-Saharan Africa in particular, people are moving to cities when they are poorer and less productive than were their nineteenth and twentieth century counterparts in developed countries. In addition, population densities in many urban areas of South and South East Asia and sub-Saharan Africa are also much higher than what we observe in developed countries.
These facts are true for all three East African countries. However, Kenya might be slightly worse off due to both a relatively higher rate of urbanization (vis-a-vis Uganda) and higher density (vis-a-vis Tanzania, which has a slightly higher urbanization rate). The gap between demand and supply of urban infrastructure means, for example, that Nairobi (and other pockets throughout Kenya) now routinely goes through a “cholera season” when it rains. About 60% of Nairobians live in areas that qualify as informal settlements (these cover under 10% of the city’s total land mass). So much for the benefits of urbanization.
Kenya also suffers from the problem of deep spatial inequality. The government has for decades neglected populations living far from the line of rail and road network from Mombasa to Kisumu (see map).
This legacy has created deep spatial inequalities in access to healthcare, schools, water and sanitation, roads, and other infrastructure. It is very hard to overcome deep spatial inequalities like these and achieve respectable national averages on human development indicators. Notably, this situation will likely worsen since population growth is faster in the darker shaded counties on the map above. Layered on top of these broad patterns of “core” vs “periphery” disparities has been the neglect of pockets of political out-groups even within the “core” regions of the country. For instance, counties around Lake Nyanza have the lowest life expectancy — mostly due to policy failures with regard to the control of communicable diseases.
Understanding the human development patterns in Kenya and the region is important for two reasons. First, while retaining its overall regional economic dominance (see graph), Kenya has nonetheless struggled to convert growth into broad-based human development. This is evident not only in the street protests over the last two years, but also in data on overall human development. Second, most elites in Nairobi are mentally stuck in an era when Tanzania and Uganda lagged far behind Kenya on almost every measure. That’s no longer the case. Kenya may have started the race ahead, but as discussed below, important features of its political economy may ultimately doom it to a relatively lower peak behind its two East African neighbors.
II: Paths not taken
At independence in 1963 Kenyan elites faced important decisions regarding the choice of a national ideological posture (capitalism vs socialism) and how to rapidly develop the country (national development vs strategic regional development). The specific choices made were informed by historical inertia, ethnic geography, and electoral politics. The choices made back then planted the seeds of contemporary patterns of uneven spatial development, high levels of inequality, regional/ethnic rivalries, and the incongruity between economic performance and human development outcomes.
The ideological battle was largely fought within the ruling party, KANU; while the choice of development strategy pitted the country’s “core” against the “periphery.” In the end, and despite official symbolic genuflection to “African Socialism,” Kenya ended up ideologically capitalist albeit with a heavy dose of state direction (largely defensible on the merits); and with a focus on strategic regional development of “productive” parts of the country— i.e., the already agriculturally rich bits within the “core” (patently indefensible).
Led by Kenyatta and Mboya, the dominant coalition within KANU had good reasons to choose the capitalist path. Kenyatta and his Kitchen Cabinet had strong social ties to elites who had directly benefitted from the Swynnerton Plan and other land acquisition schemes. He also personally acquired lots of land in the immediate postcolonial period. Therefore, land redistribution — championed by KANU leftists like Oginga Odinga and Bildad Kaggiah — threatened him personally. On his part, Mboya was a popular right-leaning trade unionist (not least due to his links to the ICFTU) who had politically captured urban laborers; and was interested as much in labor discipline as labor rights. His capture of upwardly mobile urban wage workers limited the initial socialist mobilization potential of the Odinga/Kaggiah camp within KANU to the landless “peasantry” in Central Kenya who were a relatively small share of Kenya’s population. In addition, ethnicity proved to be an effective antidote against socialist mobilization of Kenyatta’s co-ethnics.
The choices of the Kenyatta/Mboya ideological camp were reinforced by Kenya’s lack of the socio-economic basis for successful socialist political mobilization. Socio-economic relations in most of the country (outside of the class-based society that has emerged in Southern Kikuyuland and the coastal strip) was still relatively flat. The rural “peasantry” owned their land (either directly or through culturally enforceable communal tenure); and the relatively small urban “proletariat” were ideologically captured by Mboya. In the 1960s less than 10% of Kenyans lived in urban areas, with most of them owning land in the countryside and having something to loose, for example, if land were to be fully nationalized (it’s instructive that early leftist mobilization in Kenya focused on the redistribution of land stolen by colonial settlers and not full-scale nationalization). Any hopes of the trade unions building their independent bases of political support (which included calls for a labor party) perished with the 1963 elections. Of the many trade union leaders who stood for election as independents, only one was elected to office. And when a section of the trade union leadership explicitly allied with Odinga’s Kenya People’s Union in 1966, the rank and file opted to stay in KANU.
Historical inertia reinforced the ideological leanings of KANU’s dominant faction. At independence Kenya’s largest sources of forex was cash crop exports. The manufacturing sector was still very much foreign-dominated. Stability in the agricultural sector, where the dominant ruling faction made their money, meant not upsetting the existing equilibrium in the land tenure regime. And rapid development meant doubling down on the main show in town: cash crops.
The question of whether Kenya would pursue national vs strategic regional development was answered in the infamous Sessional Paper No. 10 of 1965 titled, African Socialism and its Application to Planning in Kenya. The policy paper has justifiably received strong criticism over the decades for locking in uneven spatial development and many contemporary political problems bedeviling the country. Here is Article 133:
One of our problems is to decide how much priority we should give in investing in less developed provinces. To make the economy as a whole grow as fast as possible, development money should be invested where it will yield the largest increase in net output. This approach will clearly favour the development of areas having abundant natural resources, good land and rainfall, transport and power facilities, and people receptive to and active in development. A million pounds invested in one area may raise net output by £20,000 while its use in another may yield an increase of £100,000. This is a clear case in which investment in the second area is the wise decision because the country is £80,000 per annum better off by so doing and is therefore in a position to aid the first area by making grants or subsidized loans.
From this initial motivation, policymaking in Kenya basically favored the politically connected “core” parts of the country; thereby locking in both their economic and political advantages. To put it mildly, the strategy proved too convenient for politicians motivated by ethnic favoritism and/or the political/economic exclusion of Kenya’s peripheries (and opposition-dominated parts of the core). The same leaders then championed a national ideology of individual ambition and community self-help (Harambee!) President Jomo Kenyatta routinely emphasized the idea that poverty was a symptom of laziness.
Would a different administration — perhaps led by Mboya/Kibaki and not Kenyatta — have yielded markedly different outcomes from the implementation of Sessional Paper No. 10? I highly doubt it.
The policy was designed to optimize growth in “high potential” agricultural areas and to ignore the rest of the country. Period. The half-hearted attempt in Article 134 to justify this sort of state-directed engineering of spatial inequality was fairly weak. The claim then was that “[t]he purpose of development is not to develop an area, but to develop and make better off the people of that area” (emphasis in the original). This move then allowed for the assertion that “low potential” areas would receive development of their human capital; and that the policy would “[encourage] some of the people to move to areas richer in resources.” This was a totally vacuous claim. First, given the sensitivities around land, high rates of migration into the “high potential” areas was a nonstarter. Second, the government’s strategy of promoting mass education was through self-help, i.e., the famous Harambee Schools. In practice, this meant that places that were already better off had the means to build more or improve existing schools.
All this to say that Kenya’s development policies have always been about areas, and not necessarily people. That is the best way to understand official tolerance of jarring levels of spatial inequality in human development across the country. Even in the “high potential” areas, the government basically piggybacked on colonial mission schools and Kenyans’ culture of learning and education attainment to produce high quality human capital. The subsequent state failure to sustainably cultivate a high-achieving higher education sector also speaks to this fact.
III: Bad economic policies begat bad politics
The choices made in the 1960s put Kenya on a path towards a “politics of development” that emphasized redistribution (sharing the national cake) rather than production; and which robbed subnational units (the original regions and then districts after) of their fiscal and policymaking autonomy.
Kenyatta (1963-1978) abolished regional governments and took away a significant chunk of subnational taxation authority (the GPT). His centralizing efforts considerably shrank the share of the budget spent by subnational units (see graph). It took Daniel arap Moi’s District Focus for Rural Development (DFRD) plan to stall the decline. Moi (1978-2002) represented many “peripheral” constituencies and was eager to reduce the political and economic influence of “core” regions. The plan was explicitly redistributive, and sought to turn Districts into the main loci of development planning and execution. In theory, this could’ve worked, especially if the focus was on human development throughout Kenya. In practice, however, DFRD was swamped by Moi’s paranoid politics. Instead of empowering the districts, DFRD became a mechanism for micromanaging intra-elite politics and patronage networks.
In any case, eventually the fiscal crises of the 1980s, implementation failures in the districts, as well as the advent of multiparty politics pushed DFRD off the agenda.
It would take almost 15 years for the next political investment in equitable subnational development — in this case devolution — to emerge. If DFRD was about devolving development planning to the Districts, the push for devolution as enshrined in the 2010 constitution was about doing that plus cutting the imperial presidency to size in order to limit State House’s discretionary authority over subnational development. The idea was that it is impossible to devolve development planning (to cure historical injustices caused by spatial inequalities) as long as political and fiscal powers were concentrated in the presidency.
As shown above, the 2010 constitution significantly reversed Kenyatta’s centralization. Unfortunately, it didn’t fix Kenyan elites mental models of how development works. To a large extent, the governing class in the 47 counties still think in terms of redistributive sharing of the national cake and the development of places and not people. Very few counties bother to strengthen their own source revenue (OSR) base as a foundation for investing in their residents’ development. Indeed, many pilfer their budget allocations and invest in Nairobi — moves that defeat the very idea of devolved development planning and execution. Consequently, the counties’ OSR effort rate stands at a paltry 24%:
For instance, the CRA (2022) estimates that counties have the potential to increase their OSR from the current KSh 31 billion to over Ksh 130 billion per year if they fully exploited their revenue sources. Strengthening OSR can provide counties with a reliable revenue base, enhancing their ability to finance local priorities without solely depending on the national government.
As a result, devolution in Kenya performs well below its potential as an experiment in developmentalist self-government. Perhaps the best illustration of this is its failure to ameliorate dissatisfaction with the national government. Kenyans don’t see much purchase in focusing their attention on county governments. They know from experience that discretionary powers over development never left State House.
IV: Evolving business-state relations and development strategies
Layered on top of the politics of redistribution has been over a century of the private sector’s co-dependence with the Kenyan state. In the colonial era the British government stole land on behalf of settlers, shielded the same settlers from competition vis-a-vis more productive Kenyan farmers, and coerced labor (to suppress wages) for the benefit of both agricultural and industrial interests. While after 1963 there was greater respect for property rights (including over labor), major commercial interests still enjoyed disproportionate access to the presidency and therefore influence over policy.
The character of the ascendant private sector partner to the state shaped the feasible set of development strategies under each of the 5 administrations so far.
Under Jomo Kenyatta (1963-1978) it was landed elites, beneficiaries of the Africanization of leading firms (through joint ventures with MNCs), and senior bureaucrats who did business with the state. Many of the specific individuals involved were co-ethnics of Kenyatta. During this era the state’s policy focus was agricultural development (with some impressive results), and import substitution in manufacturing (many failures).
Moi (1978-2002) lacked a large number of wealthy co-ethnics around whom to construct the country’s development agenda. Therefore, he had to mint new ones on the fly — mostly in the form of joint ventures with MNCs and a section of “market-dominant minorities” in Kenya. Under Moi the Kenyatta-era elites had to shape up, or see their policy influence (and government support) wane. The policy posture (and related failures) remained the same (cash crops plus import substitution), but with the caveat that certain sectors (e.g., coffee) got neglected because of politics. In general, Kenya missed a lot of opportunities under Moi because of the need to craft new business-state relations. Importantly, the new networks weren’t consolidated enough to be able to discipline state policy responses to the crises of the 1980s and 1990s.
During Mwai Kibaki’s presidency (2002-2013), the private sector partners of choice were titans of finance. As far as the private sector goes, they were the biggest beneficiary of his tenure. While Kibaki — Kenya’s best president yet by far — gets deserved credits for fixing the Moi economy and placing Kenya in the path to higher growth, it would’ve been ideal if his partners of choice were agriculturalists and industrialists. The growth of finance (and financialization of large sections of the economy) under his watch did not sufficiently address the problem lack of access to affordable credit. Instead, policy created markets for financiers to make money.
In contrast with the first three presidencies, there weren’t/aren’t clear sectoral anchors of business-state relations under Uhuru Kenyatta and William Ruto. Instead, both presidents personally became the link between the private sector and the state through their dealmaking. The results of this posture are clear: total policy indiscipline and lack of deal enforcement between the state and the private sector. Having sectoral anchors of business-state relations forces all interested parties to develop a consistent development strategy; and the capacity to enforce deals even when they do not directly benefit the president. To put it mildly, what Kenya has had since 2013 is a triumph of expediency in pursuit of the next big deal.
The Kenyan private sector may be bigger today than under previous presidents, but collectively it’s perhaps the weakest (in terms of policy influence and deal enforcement) it has ever been.
Needless to say, the current state of affairs makes it very hard for the state to successfully lean on the private sector (as must happen) in its push for faster growth and job creation. The types of businesses that self-select into the existing deal space will be short-termist and wary of too much exposure to the Kenyan economy — not least because the president’s word isn’t always bankable. Whatever growth that comes out of such dealmaking will likely not produce broad-based human development.
Overall, the evolving types of business-state relations have reinforced the idea of development of areas and not necessarily people. Growth has not been intensive enough to warrant concerted attention on boosting productivity via improvements the quality of human capital, i.e., investing in people. In the same vein, politics has focused on spatial inequalities and the need for inter-ethnic redistribution in a manner that favors elite capture (see devolution); as opposed to real broad-based human development throughout the country.
V: Visions of 2063
In 2063 (a mere 38 years away) Kenya will be a century old. While not that far off, this is enough time to try and reorient Kenya’s development strategy. But how can Kenya escape the legacies of deliberate engineering of spatial inequality? The answer, I believe, lies in reorienting the goal of development from primarily developing areas to developing people. Focusing on developing people would mean ensuring that policy addresses both human capital development and private sector growth to create well-paying jobs. It would also necessarily require a national development plan that stretches well beyond the line of rail from Mombasa to Kisumu. The casual tolerance of dehumanizing poverty in Kenya’s periphery (and increasingly within the core) must be a thing of the past.
Readers with some comparative knowledge might wonder why Kenya needs to invest more in people. Isn’t the country a regional leader in the quality of its stock of human capital? The simple answer here is that for a long time now Kenya has not invested in the type of human capital needed to fire on all cylinders in the 21st century. Kenya’s human capital development has been great for service sector jobs and low-tech manufacturing (especially in areas related to agriculture). In order to grow faster and create enough new jobs it’ll need much more than that — especially in engineering and biosciences. Unfortunately, Kenya’s higher education system has been hobbling along without sufficient resources for the better part of four decades. And for about 20 years it’s basically destroyed the public education system at the primary level. Things are bad. And will very likely get worse.
In my view, focusing on developing people would provide a basis for a much-needed reset to Kenya’s social contract. The fact that recent protests have been concentrated in the core, the very areas that have most benefited from official neglect of the periphery, is a reminder of the need to start investing in people. These protesters may be better off than their counterparts in the periphery, but they are also more intensely aware of rising inequality and the gap between Kenya’s potential and the reality they are currently doomed to live.
As noted above, Kenya’s developmental trajectory so far — characterized by a strong state, spatial inequality, growth without broad-based human development, and fairly weak nation-building — will most likely limit the country to a low developmental ceiling. To avoid this fate, there’s a need for a new social contract founded on a commitment to broad-based human development — visibly signaled by aggressive investments in quality education and healthcare for all. This foundation will shift the official mindset so that all development strategies and initiatives come to be evaluated on their impact on human development (and not just visible development of places). The idea of, say, successful export-oriented flower farms next to shanty towns must be a thing of the past.
Such investments must also be devolved (with national standards, of course). Kenya’s potential ability to run 47 experiments in developmentalist self-government remains terribly underappreciated.
Notice that this is a conversation that is much bigger than the current administration. As I’ve noted repeatedly, there’s little indication that its leadership has what it takes to step onto the grand stage of history and be counted. That said, I remain hopeful that structurally Kenya is trending in the right direction. Kenyans are impatient for positive change. The situation has gotten to a point whereby either elites will realize the need to midwife change on their own terms, or the forces of history will force them to accept a new social contract under conditions not of their choosing.
To be clear, the sort of reset I propose is necessary because it’s hard to successfully execute on policy (however ambitious) in the absence of reasonable levels of government legitimacy and public trust. Under such circumstances, governments turn insular and defensive, policy is seldom participatory, growth becomes divorced from broad-based human development, inequality deepens, and major political crises become inevitable. This is a fate Kenya must avoid at all costs.
Well put, Ken! Very effective linking of spatial inequality to what some might see as Kenya's counterintuitively low national averages on health indicators, compared to neighbouring countries. I argued in C. Boone, Spatial Inequality and Political Cleavage in Africa: Regionalism by Design (Cambridge, 2024), that core-periphery patterns of spatial inequality and the political dynamics that emerge from these are visible in many countries of sub-Saharan Africa. Your observations about how policy contributes to spatial inequality, and how policies could be designed to mitigate this, are well taken. Thanks for a great post on An Africanist Perspective.
Excellent analysis as always. On areas (periphery vs core), during the 2007- 2013, there was a ministry in charge of the arid zones. I think it was folded after the 2013 elections. I wonder if it was effective in Amy way.
A focus on human development, can be a useful experiment, as a policy direction. Unfortunately, education and health have taken a beating, and there doesn't seem to be serious interest in making things better.