Looking at 2012, experts from the Brookings Africa Growth Initiative (AGI) and colleagues from think tanks based in the region have come together to produce this year’s issue of Foresight Africa, where they outline the top priorities for the continent for 2012 and beyond. AGI scholars assess what they see as the major challenges for Africa in the coming year and provide policy recommendations on how to manage these challenges and leverage opportunities to catalyze and reignite growth in 2012. Similarly, AGI and its partner think tanks identify country-specific challenges in Nigeria, South Africa, Senegal and Kenya.

UN Photo/Stuart Price/Flickr*

There is a lot about the world that defies explanation. But if we do know one thing it’s that the world is a complicated place. That answers aren’t always obvious. That you have to look at short-run and long-run dynamics, with the full inter-play of all the forces, to truly begin to understand why things in our world happen as they do.

The tragic famine that struck Somalia this summer is no exception to this rule, which occurred as East Africa faced one its worst droughts in 60 years, precipitated by dangerously low rainfall, depleting food supplies, and rising prices of basic necessities like grains and milk. But droughts and food shortages do not by extension lead to famines, which the United Nations conservatively will only declare when “acute malnutrition rates among children exceed 30 percent, more than 2 people per 10,000 die per day and people are not able to access food and other basic necessities.” While food shortages are, perhaps, necessary for famine, they are not sufficient. In today’s world starvation is the product of not only biological and economic forces, but political ones, too.

The draught was not confined to Somalia. In fact, food shortages are plaguing the entire Horn of Africa, which includes Kenya, Ethiopia, Sudan, and Eritrea. American officials estimate that across the region, more than 10 million people need emergency rations to survive. But the UN has declared the catastrophe an official famine in only two areas southern Bakool and Lower Shabelle, both are in southern Somalia, both are controlled by the lethal militant group, al-Shabab. There are reasons for this.

Al-Shabab did not cause the draught, but it is in large part responsible for the country and world’s inability to mitigate the damage of food shortages through aid. Al-Shabab, bound together by fundamentalist Islam and a desire to topple Somalia’s transitional government, has decried aid workers as “infidels” and openly attacks aid workers in its controlled territory. The group was responsible for 20 humanitarian deaths in 2008 alone. Needless to say, this hostile environment poses a significant obstacle to humanitarian efforts to relieve starvation in southern Somalia.

There are three major options for humanitarians looking to send food supplies to southern Somalia and each is less appealing than the last. First, they can send crates by truck or rail into Nairobi, the capital of Somalia’s neighbor to the south, Kenya, and then bravely truck the food across the boarder. In this option, Kenya’s ubiquitous corruption stymies aid workers at every turn. The railroad is so poor, aid logicians avoid it; roads are riddled with potholes; bridges are unreinforced. Corrupt officials “tax” the aid at every turn.

Aid workers’ second choice is to ship food crates to Mombasa, Kenya’s second largest city, and the closest major port to southern Somalia. Mombasa’s notorious bureaucracy and painfully inefficient customs system makes the city a pressurized bottleneck for shipments. Food sits in shipping containers that take weeks to process, sitting in warehouses as thousands starve just a few hundred miles away. The last option for a point-of-entry is Mogadishu, the least cost-effective choice as food crates must be flown in by plane. The Mogadishu airport, by the way, is surrounded by members of al-Shabab with very large guns, who aren’t afraid to use them. And the city itself has been caught in a relentless salvo by groups that have fought for control without rest since 1991.

Fran Equiza, a regional director at Oxfam, has called the famine “a catastrophic breakdown of the world’s collective responsibility.” While I agree with the sentiment, I do not believe that the problem could have been solved with aid money and manpower. The political realities in Somalia make aid delivery difficult and perilous to the point of impossible.

With climate change, these draughts in East Africa will only become more frequent and more acute. The region—and the world—must prepare now to confront these challenges. Aid alone will not solve or control the problem. To effectively deal with these worsening conditions, we must confront endemic corruption, terrorism, and lawlessness. Somalia must develop an accountable, functioning central power that is capable of controlling its own security, even in remote areas. That sentence, though, is optimistic to the point of ludicrous and it seems all the more unlikely given that a large part of its population is in a struggle for their lives. Unfortunately, options are limited in this failed state.

This year, on October 6^th and 7^th , the Task Force on Financial Integrity and Economic Development will host their annual conference. This year’s conference, which will be held in Paris, is titled “Tackling the Shadow Financial System: A Working Plan for the G20.” The topic Illicit Financial Flows and Inequality: A Human Rights Imperative will be the subject of one of the breakout panels.

* Image license: Some rights reserved by United Nations Photo

NAIROBI — Kenya lost about Sh156 billion between 2000 and 2008 to illicit outflows of capital perpetuated by wealthy businesspeople and multinationals. These resources can finance about 70 per cent of Kenya’s 2010/11 development budget of Sh222 billion.

Global Financial Integrity (GFI) director Raymond Baker said intra-company deals represent about 50 to 60 per cent of cross-border trade where most of the money is lost through clever accounting. “I have never known a multinational, multibillion-dollar, multiproduct corporation that doesn’t use fictitious transfer pricing in some part of its business to shift money in some of its entities,” Mr Baker says.

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The Kibaki administration is ruffled by the United States Government latest actions on Kenya and it has nothing to do with travel bans. Money is at stake and the soft underbelly of the regime is exposed. Although it touts itself as financially self-reliant, in truth the Grant Coalition Government of Mwai Kibaki and Raila Odinga cannot afford to ignore the International Community and especially the United States’ stated intention of scrutinizing all loans and financial programmes for Kenya by the International Financial Institutions.

The statement continues, moving on to state that the actions of the U.S. to pressure reform within the government not only have the power to influence Kenyan politicians, but that they are also supported by the Kenyan public:

The news is encouraging, because it means that the Kenya Government cannot as it has always done in the recent past ignore the demands of Kenyans for reform and implementation of the National Accord without consequences. The picture emerging is that the Kenyan public have friends and powerful friends to boot and now the Grand Coalition Government could be facing a serious reality check. You can thumb your nose at public opinion about your economic management of public resources, but there are responsible Governments in the International Community who will have none of it.

Emphasizing this point further, the statement notes that:

The United States is certainly not acting alone. It acts with the support and gratitude of Kenyan Public. The latter is confirmed by public opinion polling by the Kenyan media. The sign of the times, if now seen for what it is should shock the Government into immediate action. The Kenyan Government as sovereign as it may claim to be, cannot do without Bretton Woods Support and the Kenyan public will refuse to be committed to pay private commercial loans to support a Government that is not accountable to its people.

This action by a non-governmental organization within Kenya demonstrates the demand that Kenyan citizens have for government accountability as well as an understanding of the ways in which the Kenyan government relies on international support in order to stay afloat. The organization has previously written letters to Kenya’s multilateral and bilateral donors. In one letter, the organization asked the IMF Board of Directors, “to consider the opinion of those Kenyans who will inevitably be taxed to repay whatever loan the Government of Kenya obtains regardless of whether or not Kenyans obtained any developmental benefit from it.”

The statement points out that the World Bank had already suspended two large projects over the course of two days. This is following Kenyan government auditors’ discovery of losses worth $1.8 million in two World Bank-funded projects. According to Finance Minister Uhuru Kenyatta, the losses appear to be due to “fraud and corruption.” The efforts of the U.S. are echoed in Kofi Annan’s return to Kenya on Sunday, on a visit in which he is “expected to pressure Kenyan leaders to speed up the pace of reforms…”

Nairobi – U.S. Secretary of State Hillary Clinton challenged Kenya’s youth Thursday to utilize new media technologies to shine light on public corruption in the country. She continued her message that only Kenyans can solve Kenya’s problems.

Secretary Clinton told the Kenyan crowd that corruption is best fought through transparency. She said that the Kenyan public can play a significant role in bringing the corruption to light.

Continue reading at VOANews.com…

Clinton drove home the economic consequences of corruption, arguing that: “This is not just about good governance — it’s also about good business.”

An Associated Press article opens with the lines:

U.S. Secretary of State Hillary Rodham Clinton criticized Kenya on Wednesday for rampant graft and corruption as she made the case that business and trade across Africa cannot grow without good governance and solid democracy…Clinton said, “True economic progress in Africa will depend on responsible governments that reject corruption, enforce the rule of law and deliver results for their people.”

Clinton also focused on the heavily contested debate over where suspected perpetrators of the violence following the December 2007 elections should be tried and on the government’s failure to implement the reforms agreed upon during the formation of the current coalition government. Commenting on the post-election violence, the role of the U.S. in resolving the dispute, and the current state of justice, she stated:

“…the absence of strong and effective democratic institutions has permitted ongoing corruption, impunity, politically motivated violence and a lack of respect for a rule of law,” Clinton said. “These conditions helped fuel the postelection violence and they are continuing to hold Kenya back.”

Clinton also took note of rampant corruption within Kenya’s judiciary system, her visit coming on the heels of a decision to try suspected perpetrators of violence within the court system instead of a special tribunal. She even used a phrase commonly uttered in Kenya, “why hire a lawyer when you can buy a judge,” in reference to judicial corruption.

Kenyan newspapers covered these issues, with an additional focus on Clinton’s message that Kenyans must be responsible for reducing corruption and on the fact that the U.S. would not pose sanctions on Kenya (coverage leading up to Clinton’s visit speculated potential sanctions from the U.S.) An article in one of Kenya’s major newspapers even opened with the line:

“Hillary Clinton’s top assistant on Africa has made clear why the United States is unlikely to take punitive action aimed at forcing reforms in Kenya.”

CNN also noted this point, quoting Clinton saying that: “We will consider consequences aimed at individuals, not aimed at the people of Kenya.” The emphasis Clinton placed on the role of Kenyans to solve corruption ranged from the statements that: “The US cannot solve Kenya’s problems… we cannot dictate to you how to run this government; it is not up to us…The answers to Kenya’s challenges lie with Kenyans,” to concrete steps Kenyans could take to act. Quoting The Daily Nation, a major Kenyan newspaper:

Terming Kenya as a “very political country” where “everybody has a political opinion”, Mrs Clinton asked those in the civil society to join politics and try to change the system from within…The pledge to support Kenya’s relatively vibrant civil society led to a call to all Kenyans to submit their ideas to a special portal on the website of the US Embassy in Nairobi…“Use the website to tell us what you think we can do to help you make your country better,” she said.

Clinton has driven home the message that taking measures against corruption is necessary not only to attract investment, but also to end impunity and other social ills underlying the violence that ensued after the 2007 elections. She has placed the burden of doing so on Kenyans, but has nonetheless firmly stated the U.S. position and a willingness to assist Kenyans in the fight against corruption. In doing so, she has echoed the message that President Obama set forth in Accra, that while Africa faces a history wrought with challenges that plague the continent today, it is up to Africans to take responsibility for Africa. To conclude in the same vein, Obama delivered a video message after Clinton’s speech, in which he proclaimed that: “Only Africans can unlock Africa’s potential.”

NAIROBI, Kenya — Secretary of State Hillary Clinton delivered a “tough but lovingly presented” message to Kenya on Thursday: shun corruption and reform government.

African governments should uphold the rule of law to attract investment and ensure economic growth, Clinton said during a town hall meeting at the University of Nairobi.

Continue reading at CNN.com…

The taxman is losing an estimated Sh100 million every week in a tax evasion scheme involving unscrupulous importers working with corrupt customs and airport officials, according to the findings of a Sunday Nation investigation.

The epicentre of the operation in which importers bring in items ranging from top-of-the-line household goods to vehicle spare parts – all tax free – is Eastleigh, the bustling business centre just east of Nairobi’s central business district that has become notorious for illicit trade and huge cash transfers.

Continue reading at Nation.co.ke…