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Is the BBI ruling a sign of judicial independence in Kenya?

Is the BBI ruling a sign of judicial independence in Kenya? | Speevr

On May 23, 2021, a special five-judge bench sitting at the High Court of Kenya at Nairobi declared unanimously that the Constitution of Kenya (Amendment) Bill, 2020 was unconstitutional. The High Court’s judgment, argued journalist and commentator Ferdinand Omondi, “is arguably the most significant ruling by Kenyan courts since President Uhuru Kenyatta’s election win was nullified in 2017.”

Notably, the government has appealed the ruling of the High Court and the case is now before a seven-judge bench of the Court of Appeal, with presiding. The Court of Appeal is expected to deliver its verdict on August 20, 2021.
Importantly, the judicial decision and subsequent reactions from the Kenyan political class, civil society, and institutional actors appeared to shed light on the changing political environment within the country as well as the continuing strengthening of democratic institutions, especially at the national level.
The ‘handshake’ and the Building Bridges Initiative
The Constitution Amendment Bill 2020 was an outcome of the Building Bridges Initiative (BBI)—an effort by Kenyatta and political rival Raila Odinga, the leading contenders for the presidency in 2017 and their supporters. The BBI was expected to generally improve governance and prevent future post-election violence like that of the aftermath of the 2017 elections.
Indeed, in March 2018, Kenyatta and Odinga publicly declared that they had decided to put aside their political differences and come together through a “handshake.” As magnanimous and patriotic as this political gesture may have appeared to many observers, especially since it “brought calm and a sense of relief” to Kenyans following the extremely contentious 2017 presidential election, another interpretation is that this was essentially an effort to ensure the continued political relevance of Kenyatta and Odinga. In fact, many cynics view the truce with suspicion, arguing that this rapprochement could place Kenyatta, who is constitutionally barred from standing for a third term as president in 2022, in a position to assume the role of managing the country behind the scenes with a puppet president in post-2022 Kenya.
Importantly, while the handshake may have it did not resolve the feelings of alienation and marginalization that continue to consume some ethnolinguistic groups that are suspicious of the central government and believe that it is either unwilling or unable to deal effectively and fully with issues of extreme poverty and underdevelopment, inequality, inequities in the distribution of income and wealth (particularly land), ethnic animosity, and other problems that have relegated them to the political and economic margins.
The constitutional amendment bill

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The Kenyatta-Odinga handshake led directly to the production of the Building Bridges Initiative (BBI), whose main objective was to thoroughly investigate nine issue areas that were deemed by Kenyatta and Odinga to be critical to the creation of “a united nation for all Kenyans living today, and all future generations.” Among the BBI report’s wide-ranging series of recommendations are institutional reforms for significantly restructuring the country’s institutions, particularly its constitution, and reintroducing a hybrid system of government that will include power-sharing between a president and a prime minister, with members of the Kenyan Parliament effectively allowed to serve as part of the Cabinet.
If implemented, the proposed BBI reforms will likely undermine the country’s institutions of governance. They will also threaten judicial independence, eliminate opportunities for the formation of an effective opposition to government, severely erode Kenyan democracy, pervade any efforts to adhere to the rule of law, and make it extremely difficult to build the types of national ruling coalitions that can advance the interests of all Kenyans, instead of those of specific ethnolinguistic factions. In response, five political activists have challenged the process before the High Court.
The High Court rules on who can initiate amendments to the constitution
In May of 2021, the five-judge bench struck down the proposed amendment, declaring that “the President does not have authority under the Constitution [of 2010] to initiate changes to the Constitution, and that a constitutional amendment can only be initiated by Parliament through a Parliamentary initiative under article 256 or through Popular Initiative under Article 257 of the Constitution.” In other words, an amendment must emerge from the ordinary citizen and not the president, as required by the basic structure doctrine.
In this way, the court declared that the BBI steering committee was “an unconstitutional and unlawful entity,” hence not recognized by law, and with no legal capacity to initiate any action to change the constitution. In other words, the entire BBI process, which ultimately culminated in the Constitution of Kenya (Amendment) Bill 2020, was unconstitutional. Importantly, the court went further: In order to prevent “the mischief of disguising unpopular amendments among the popular amendments of the constitution,” the court held that each referendum designed to effect amendments to different articles of the constitution must have multiple questions, each dealing with each proposed amendment to the constitution.
The High Court then issued a permanent injunction that effectively restrained the Independent Electoral and Boundaries Commission (IEBC) from verifying that the initiative is supported by the requisite number of voters and submitting the draft bill to each county assembly for consideration. Finally, the court held that President Kenyatta could be sued in his personal capacity “in respect of anything done or not done contrary to the Constitution.”
Is Kenya an example of increasingly strong democratic institutions and judicial independence?
Kenya has been here before when it comes to contentious political issues being brought before a high court. Indeed, in September 2017, the country’s Supreme Court, under a challenge from Odinga, then-leader of the opposition, annulled the 2017 election and called for a new election to be held within 60 days. This Supreme Court ruling was “an unprecedented move,” particularly in a region in which judicial independence is a rarity and the executive branch of government usually dominates and controls the judiciary. Indeed, this ruling was considered historic and an important development in Kenya’s efforts to entrench democracy and the rule of law.
However, Odinga boycotted the rerun election in October 2017, “claiming that he and his party lacked confidence in the credibility of the process,” which led to Kenyatta capturing 98 percent of the vote. Although Odinga rejected the results, he did not challenge them before the courts. Nevertheless, a number of private citizens did challenge those results in several petitions to the Supreme Court, but the Supreme Court held that the rerun election had fulfilled or met all the constitutional requirements and hence was valid.
Despite this exemplary performance, Kenya’s judiciary continues to face some major challenges, which include the need to significantly “expand its own infrastructure and build professional capacities” as well as make certain that the integrity of judges “must never be in doubt.” In addition, political interference and lack of financial security remain serious threats to the independence of the judiciary.
Amending Kenya’s constitution
The constitutional review process is extremely complex and is often plagued by the factional appeals of special interests, which are contrary to the common will of the people. This complexity and the occasional intervention by factional interests partly explain why it took Kenya more than 20 years to finally produce a new constitution in 2010. The process through which the constitution can be legally amended is spelled out in Article 255. Initiatives to amend the constitution can originate in the Kenyan Parliament through a bill. The role to be played by the president, the public, and the IEBC are spelled out in Article 256. An amendment to the constitution can also be proposed by a popular initiative, which must be signed by at least 1 million registered voters. Such a popular initiative can be in the form of a general suggestion or a formulated draft bill as elaborated in Article 257. While the constitution does not grant the president the power to initiate changes to it, the president still has an important role to play—he or she can provide the leadership to make certain that amendments are designed to maximize the interests of the people writ large and not those of some faction, regardless of how it is defined.
Lessons from the High Court ruling and other signs of the strengthened rule of law in Kenya
There are several lessons that Kenyans and other Africans can learn from the High Court’s 321-page and well-reasoned and articulated judgment made in May 2021. First, the process, as frustrating as it may appear to Kenyatta, Odinga, and other supporters of the BBI, has reaffirmed the important role that courts can and must play in the peaceful resolution of political and constitutional issues in Kenya. Second, the ruling shows that Kenya’s constitution is working perfectly well—the petitioners, who strongly believed that the BBI process was unconstitutional and hence, unlawful—chose, and were able, to take their grievances to the High Court, instead of resorting to extra-constitutional approaches, such as violent mobilization. Indeed, the decision by both proponents and opponents of the BBI process to adhere to the law augurs well for constitutionalism and the rule of law in Kenya.
The way forward for Kenya
Despite the claim by Kenyatta and Odinga that the BBI is designed to finally bring to an end ethnic-induced post-election violence, this process, if successful, will only undermine Kenya’s constitutional order and threaten its democratic institutions. While the additional 70 parliamentary constituencies might satisfy and placate the groups that benefit from these new constituencies, those that consider themselves marginalized by the new constitutional changes will make demands for additional constitutional changes to accommodate them. Such opportunism is unlikely to end until all groups in Kenya, whether identified by religion or ethnicity, have been assigned their own political constituencies, effectively rendering the Kenyan state virtually ungovernable.
Kenya’s 2010 constitution essentially introduced a pseudo-federalist system consisting of national and county governments, with the goal of bringing government closer to the people, improving participation and inclusiveness, and abolishing what had been a dysfunctional and untenable governing process inherited from the colonial state. However, in contrast to a federalist system, sovereignty is not constitutionally divided between the national government and the counties and, in addition, national legislation can override or prevail over county legislation in some cases. Granting the national government significant constitutional powers to interfere with governance in the country’s subnational units does not augur well for true devolution of power.
Importantly, the country’s existing constitution already spells out and emphasizes the separation of powers, and these recent court rulings prove that the system is working. The BBI must either be abandoned or be subjected to more restructuring, possibly through a more inclusive and participatory process, because in its present form, it does not augur well for the type of institutional reforms that can significantly improve political and economic outcomes in Kenya. In other words, the BBI, if implemented in its present form, is not likely to resolve the problem of post-election violence nor significantly improve the peaceful coexistence of the country’s subcultures.
Proponents of the BBI argue that if it is successful, it can provide significant benefits to Kenyans. First, they argue that it can lead to a reduction in post-election conflicts and their destabilizing impacts. Both Kenyatta and Odinga have noted the “destabilizing impact [that] post-election conflicts have had on the country’s growth over the last 30 years” and have argued that the BBI “is aimed at finding a homegrown solution to the divisive nature of Kenyan politics.” Even opponents of the BBI must agree that dealing with the country’s “divisive politics and the resultant ethnic tensions” is a public policy imperative. The two politicians also argued that the BBI will help unify the country, and address several challenges that the country currently faces, including “youth unemployment, corruption and negative ethnicity.” With this in mind, it is important to note that the High Court faulted the process and not the contents of the BBI itself. Thus, if there must be changes to the constitution, they must be undertaken through a legal process, as prescribed in the constitution.
With respect to the reforms proposed by the BBI, it is important to note that parchment prohibitions alone are not enough to secure and protect the fundamental rights of Kenyans. Like their counterparts in other African countries, Kenyans are frustrated with their political elites who have been negligent in safeguarding the rights of the masses and providing them with the wherewithal to create the wealth that they need to confront poverty and improve their living standards. While institutional reforms are critical for peace and security—as well as economic and social advancement of all Kenyans—in order for these institutions to perform their functions and advance the general welfare, Kenya must have “a virtuous public and virtuous leaders” or else the country will remain trapped in a state of political dysfunction and deteriorating economic conditions.

Mainstreaming the outcomes mindset of results-based financing

Mainstreaming the outcomes mindset of results-based financing | Speevr

Today there are over 200 registered impact bond transactions globally and 19 transactions in low- and middle-income countries. Over the last decade, impact bonds have gained momentum through repeatedly demonstrating their effectiveness. The very first development impact bond (DIB) on girls’ education generated a more than 60 percent improvement in literacy outcomes in just three years in the Indian NGO Educate Girls’ program, demonstrating the power of simple performance incentives done right. This has grown interest and a community of believers.

These exciting results have unfortunately not led to the anticipated widespread adoption of impact bonds by governments. Since the inception of impact bonds, low- and middle-income country governments have participated as outcome payers in only seven projects globally. Governments have engaged at small scale—motivated by the reputational value of paying for results, the promise of matching donor funds, or the rare politicians’ and bureaucrats’ intrinsic motivation. Impact bonds are narrow innovation instruments, but government adoption is a challenge that also holds true for other simpler results-based financing (RBF) instruments that can be easily integrated in large-scale government delivery.
While impact bonds and RBF may sound complicated or exotic, they are about deploying simple, sensible, and performance-critical delivery management practices.
While impact bonds and RBF may sound complicated or exotic, they are about deploying simple, sensible, and performance-critical delivery management practices: Clarify, articulate, and incentivize target outcomes; provide necessary autonomy to front-line staff; measure progress; reward good performance; and repeat these steps. These practices are routine in high-performing organizations but are often lacking in many developing country governments that manage trillions of dollars of taxpayers’ money.
While we should absolutely debate the mechanics of RBF (financial incentives are not always great, an overemphasis on measurement can sometimes be counterproductive, and so on), we must insist on dramatically accelerating the use of the type of citizen-centered program delivery that the RBF community is pursuing. According to a 2016 Harvard study, only three out of 102 developing countries surveyed are on track to building strong delivery capacity for basic services by the end of the 21st century. The urgent need for progress on critical local issues like inequality and global issues like climate, migration, and global security require us to change course.
Strengthening delivery governance as a precondition
Delivery failures are pervasive and have multiple root causes. However, the few success stories in sustaining excellence in government-led delivery all point to one important precondition: delivery accountability. Citizens must have the information, collective action mechanisms, and power to hold governments accountable to delivery targets—something that the World Bank also argued for in its 2004 World Development Report on service delivery
Rwanda offers a good example. The government has faced strong institutional incentives to deliver for the last 20 years. President Kagame’s government understood that delivering high-quality services to all was critical to its own legitimacy and longevity. That led to significant investments in delivery governance, including transparent yearly reporting of delivery achievements and public evaluations and sanctions of ministers who fail to deliver. In turn, that led to efforts to improve delivery performance through the adoption and scale-up of highly successful RBF programs and the establishment of the famous ”Imihigo” performance contracts, which assign delivery targets and corresponding performance payments to each civil servant. This helps explain Rwanda’s performance in universal health care, which the World Health Organization called “the beacon of universal health coverage” in 2019.
To shift from being a donor-pushed initiative to becoming a government-led practice, the RBF movement needs to deploy and support strategies that scale such delivery governance mechanisms that pressure governments to improve their performance.
Promising strategies for citizens, governments, and donors to prioritize
Today the fields of governance and service delivery work in silos. Governance work has mostly focused on “higher-level” issues like reducing corruption, the free press, and improving procurement transparency rather than governing service delivery, where much of the public spending challenge lies. As a result, most countries do not have independent institutions with the mandate, the resources, and the reach to measure the quality of public programs and hold governments accountable. Often, even ministries of finance do not collect any data to evaluate the quality of services delivered by line ministries, let alone their relevance and impact on citizens. Accelerating delivery excellence in the public sector will require working with existing governance funders and champions to develop stronger governance systems around service delivery.
Strong delivery governance systems will incentivize governments to search for greater impact, lead them to leverage readily available tools like impact bonds and RBF, and ultimately direct taxpayers’ contributions and donor grants to well-functioning delivery systems that actually produce results.
Actors trying to improve governance can create the right macroinstitutional delivery incentives, while the RBF field can equip governments with the practical tools around financing, measurement, and performance management to deliver superior performance.
Strengthening delivery governance will require at least the following investments:

Increase transparency around delivery targets and delivery performance in key areas of service delivery like education, health, social protection, and the environment. We need governments to establish quality and impact targets and provide regular progress reports for all major policy areas. This would require establishing quality measurement frameworks and investing in measurement teams, data infrastructure, and open data practices that inform citizens of the return on taxpayer money. Affordable and scalable technologies are available to help. Without this building block, citizens will not have the information required to hold governments accountable.
Strengthen independent institutions that perform quality audits by expanding the mandate and impact monitoring capabilities of national oversight bodies that audit and control governments to independently verify and audit government quality reports, and direct operational improvements where needed. Every ministry could be given a quality rating, for example, which could impact future budget allocations. It would be critical to engage citizens in this process through inclusive social accountability mechanisms to bring the citizens’ voice to life.
Drive intragovernmental incentives. A third pillar includes the introduction of performance incentives within governments’ various delivery agencies through performance-based grants. For instance, this would apply where ministries of finance make fiscal transfers to other ministries or local government at least partly conditional on delivery performance that is established by quality reports. These intra-governmental performance management measures are critical to reaching the front line of service delivery, and thereby citizens.

Each country will need a contextualized roadmap to achieve strong delivery governance. Donors, citizens, and government champions stand to gain from prioritizing and investing in these systems. They will incentivize governments to search for greater impact, lead them to leverage readily available tools like impact bonds and RBF, and ultimately direct taxpayers’ contributions and donor grants to well-functioning delivery systems that actually produce results.

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The weight of research shows that businesses and households with good environmental credentials are also better borrowers. They are less likely to default on their loans and less likely to be late on their repayments.In a well-functioning market where these broader social and economic benefits were properly priced, these borrowers would get lower interest rates. When these loans were securitised and sold on, the bonds would be more favourably priced because the underlying asset was stronger and safer.The PBoC is co-operating with the European Union to achieve convergence of green investment taxonomies across the two markets.

Does West Africa need a single currency?

Does West Africa need a single currency? | Speevr

Over a decade ago, the leaders of the Economic Community of West African States (ECOWAS), a regional trade bloc of 15 countries with a total population of roughly 400 million, committed to establishing a monetary and currency union by the end of 2020. In other words, they agreed to renounce monetary sovereignty and adopt a common currency managed by a single central bank. Eliminating multiple currencies, they believed, would dismantle barriers to the flow of goods, money, and people and lay the foundations for greater prosperity. Ultimately, they hoped their regional monetary organization might blaze a trail to an Africa-wide currency union that could unite the continent and expand its influence on the world stage.But 2020 has come and gone, and the ECOWAS currency union has yet to break ground. Despite the initial rush of enthusiasm around the project, the goal of a currency union has slipped further and further out of reach in recent years. Prior to the 2020 deadline, virtually no ECOWAS country had attained the economic benchmarks the group had established as preconditions for the union. And then came the COVID-19 pandemic, which wreaked economic carnage in West Africa, as it did in much of the world, and sent member states into economic survival mode.

Although the pandemic has set back the goal of a West African currency union, it has also highlighted the need for greater economic integration that could better insulate African countries from the whims of international financial markets. Had ECOWAS had a robust monetary union in 2020, its members might have been able to pool their resources to better protect their currencies and to negotiate more favorable terms with foreign creditors when global markets crashed in March and April, and investors raced toward the safety of the U.S. dollar.

ECOWAS leaders have now set the more realistic goal of establishing a currency union by 2027, but the path there will not be easy. As the experience of the European Union and other currency zones has demonstrated, such projects necessitate difficult tradeoffs that have the potential to divide member states. West African leaders should heed the lessons of these monetary experiments and proceed toward a monetary union of their own with caution—and only once they have built sufficiently strong economic and institutional foundations.  

AN UPHILL BATTLE

The ECOWAS currency union faced considerable challenges from the get-go, not least being the very different stages of development of the bloc’s member states. Six of its 15 members are middle-income states, with estimated annual incomes of at least $1,000 per capita. The other nine are low-income states, with per capita incomes falling below $600 in Liberia, Niger, and Sierra Leone. Countries at such divergent economic stages are unlikely to reach a consensus on short-term economic priorities even in the best of times, making it difficult to develop a uniform monetary policy for all of them.

Other economic disparities among ECOWAS states pose similar challenges to a regional currency zone. Nigeria, which is now the largest economy in Africa, accounts for about two-thirds of ECOWAS’s total GDP. By contrast, the bloc’s five smallest economies—Cape Verde, Gambia, Guinea-Bissau, Liberia, and Sierra Leone—together account for less than two percent of the group’s GDP. The disparity in population among these countries is only slightly less stark. Two-thirds of ECOWAS residents live in just three of its member countries: Côte d’Ivoire, Ghana, and Nigeria. These discrepancies in size raise the possibility that large countries could dominate policymaking in a currency union, boxing out smaller member states that have little sway as it is.

The fate of the eurozone is a cautionary tale in moving hastily toward a single currency.

Variations in economic structure add to the challenge of designing a currency union for such a heterogeneous region. Many ECOWAS economies are not well diversified and rely heavily on the sale of raw materials and resources. The result is that commodity price fluctuations have very different effects across the region. Nigeria, for instance, is a major oil exporter, and the other ECOWAS members are net importers. So while an oil price increase might benefit Nigeria, it would likely hurt the rest of the region. GDP growth and inflation also vary widely across ECOWAS countries, adding to the difficulty of managing regional economic fluctuations under a uniform monetary policy.

Existing regional currency arrangements that would overlap with any potential ECOWAS currency zone present yet another challenge. Eight ECOWAS countries—Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo—are already members of a long-standing currency union: the West African Economic and Monetary Union, which in turn is part of the euro-pegged CFA franc zone. Another ECOWAS member, Cape Verde, also has a currency that is pegged to the euro. Although WAEMU countries have begun transitioning away from the euro and toward an independent currency, their economies need time to adapt to the loss of a credible external anchor before they adopt a new currency.

THINKING OUTSIDE THE BOX

Given the array of serious obstacles to an ECOWAS monetary union, West African leaders would do well to look to the successes and failures of other monetary and trade configurations for insight. The fate of the eurozone, for instance, is a cautionary tale in moving hastily toward a single currency. The union’s lack of mechanisms to effectively prevent macroeconomic imbalances, combined with low borrowing costs and the undisciplined budgetary policies of some member states, precipitated the eurozone debt crisis that began in 2009. Poor enforcement of rules meant to bring member states’ monetary policies in line with their commitments to the zone and the subsequently harsh castigation of countries in fiscal and economic distress have likewise fostered economic and political tensions among eurozone countries. These challenges suggest that the eurozone could be fortified by a broader economic union, including a banking union, a unified financial regulatory system, and harmonized institutions underpinning the functioning of labor and product markets. These are certainly long-term considerations for ECOWAS leaders but important ones on their path toward economic integration.

The eurozone does have one critical advantage: it is anchored by Germany and several other relatively wealthy and well-managed states, including Austria, France, and the Netherlands. These economies underpin the credibility of the zone, and their resources effectively provide insurance to other member states when the economic tide is ebbing. An ECOWAS currency union would presumably be anchored by Nigeria. But although Nigeria is wealthier than other countries in the region, it faces profound economic challenges, including dependence on volatile oil prices, high inflation, political instability, and weak public governance. A currency union anchored by an economically unreliable Nigeria would likely face credibility problems from the outset, defeating its very purpose.

If they want their currency union to last, ECOWAS leaders should consider starting small.

One alternative to a monetary union—or a steppingstone to one—that could spur growth and accelerate regional integration without the added political complications of a common currency can be found in Asia. The ten members of the Association of Southeast Asian Nations have established an extensive network of financial and trade arrangements but retained monetary policy autonomy. This has allowed them to foster economic integration and to speak with a more unified voice on important economic and geopolitical issues while avoiding any tensions that might arise from trying to coordinate their monetary and fiscal policies. Should they continue to pursue a currency zone, ECOWAS leaders might consider starting with similar small steps toward trade and financial integration as precursors to a more durable monetary union.

Some such efforts are already slowly underway. The African Continental Free Trade Area, which the African Union brokered in 2018 with the aim of creating the largest free-trade area in the world, promises to substantially reduce barriers to the free movement of commodities, goods, and services across the continent. It will also give Africa the opportunity to speak with a common voice on global trade policy issues in which it has a large stake. In addition, ECOWAS itself has moved to dismantle trade barriers among its member countries—by adopting a common external tariff, for instance. These initiatives have so far had only a limited impact, in part because of lingering disharmony between domestic and regional policies, but they represent important steps toward greater economic collaboration—and they do not preclude the possibility of an ECOWAS monetary union in the future.

Indeed, ECOWAS members could reap enormous rewards from a resilient and carefully crafted currency zone. Done right, such a zone could improve trade and investment flows in the region and shore up member states’ defenses against external shocks. With a strong central bank at its center, a currency union could also serve as an anchor for inflation expectations within the zone. It could impose discipline on fiscal policies, since states would face pressure from other members to avoid reckless government spending that could result in large government budget deficits. And a currency union could facilitate important labor and market reforms by forcing member states to find ways to respond to domestic and external shocks without looking to the exchange rate.

But setting up a currency union is no simple matter. Especially given the range of disparities among member states, the loss of an independent currency and monetary policy as an economic adjustment mechanism could lead to short-term economic pain in some member countries—necessitating initial wage reductions and fiscal belt tightening, for instance. ECOWAS countries should therefore focus on getting their own economic houses in order and putting in place institutional mechanisms to ensure widespread fiscal discipline and accountability before considering a currency union. 

An ECOWAS currency zone promises considerable potential payoffs. But it also entails significant costs, operational challenges, and transitional risks that ECOWAS leaders must consider carefully before moving too quickly—or they risk making their currency union an economic straitjacket rather than a foundation for jobs, growth, and prosperity.
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