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SGR contract 'hot air': There's more than meets the eye

Financial Standard
 SGR freight train at the Naivasha Inland Container Depot, Nakuru County. [Kipsang Joseph, Standard]

The headlines on alleged details of the Standard Gauge Railway (SGR) contract disappeared as fast as they had appeared.

The threat to make the contract public first appeared during campaigns for the hotly contested August General Election.

Let's be factual. It's unlikely that the SGR contract will be made public. The key partners - China and Kenya - are unlikely to allow it.

More importantly, power asymmetry will play a role. China has lots of leverage in the whole contract, published or not. Did you notice China never talked as we debated the agreement?

That should tell you something.

The threat to spill the beans about the finer details of the agreement left my head spinning. The threat had value to keen observers. One is that we are either bad negotiators or not serious negotiators. How did some of the clauses get into such an agreement? Think of the use of dollars to hedge against the depreciation of our currency, and where would arbitration take place in case of a dispute?

The reason men pay dowry so easily is that it's negotiated in the woman's home! There is another reason why the full details of the contract are unlikely to be made public. It would demand other such contacts be made public.

Think of contracts with superpowers like the US, the UK, and France. Some date back to before independence and could contain some dirty secrets.

Further, making such contacts public would deprive the government of one of its key sources of power - secrets.

Remember serikali (government) came from sirikali (deadly secret)? The new regime is keen to be transparent, but there is a limit as it will soon discover. Even the most democratic countries have State secrets. But I think there is a good case for such contracts to be made public.

Taxpayers can know if they got value for their money. After all, they will pay back through taxes. Where were our members of the National Assembly and Senators when all this was taking place?

Why then the threat of releasing details of the contract? I noted the copy circulating had no government stamp and was between Kenya's Treasury and China Exim bank, not the government of China. One, it punctured our balloon of expectations. We have been waiting to see the contracts. It is widely believed it was a bad contract, and we wanted the "smoking gun."

Two, it was a good distraction from bigger issues like inflation, drought, and campaign pledges. Some add Kenya Airways pilot strike. No one has said what the government will do after exposure. Negotiate the terms?

Three, we failed to answer an essential question despite being mesmerised by the "hot air." How should we fund mega projects because we do not want to borrow from China or elsewhere?

And no one wants higher taxes or reduced government expenditure (read reduction on workforce and job losses).

We must face the reality that China has a lot of money to lend not just to Kenya but even to developed countries like the US through Treasury bonds. That money comes from savings.

Three, I see that threat to disclose the contract as a part of a long game, a bigger agenda. It could shift the blame of the present economic predicament to the Jubilee regime, which negotiated the contracts. Remember the popular song by Shaggy "it wasn't me?"

The contract was supposed to expose the "bad side" of China and their local partners (read Jubilee regime).

Could this be a long-term plan to shift Kenya back to the western orbit by portraying China negatively? Remember the debt diplomacy?

Genetically modified crops

Kenya has for the last two decades been facing East with one eye and West with the other. Could it now face West with both eyes?

It's not lost on us where President William Ruto visited after his inauguration. Who is likely to benefit from allowing genetically modified crops?

The western media is quick to portray China as having a detrimental relationship with African countries; any opportunity to divorce African countries from this relationship would be welcome.

Will Kenya get out of the Chinese orbit? Not in the long run.

Few countries can escape the Chinese influence as it stakes her position in geo-economics and politics. Even the US cannot ignore the rise of China, Washington's new rival for global influence.

Kenya could become a pawn as China and America fight for that influence. But China could have the upper hand because the US after Trump seems to be reducing its global reach.

China could be filling that vacuum. And Africa is an easy target, neglected or exploited by the West. China has offered tangible solutions like roads and ports. The West has been good on soft issues like democracy and human rights.

It left the tangibles exposed for China to pick. Will the US finally fund the Mombasa-Nairobi Highway to counterbalance SGR? SGR contract headlines might be hot air to the Kenyan media, but in the global scheme of things, they are not.

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