Monday, August 27, 2012

MELES ZENAWI AND THE AMBIGUITY OF THE AFRICAN LEADER


At the relatively young age of 57 Ethiopian Prime minister Meles Zenawi passed away leaving behind a somewhat mixed legacy for his supporters and critics to chew over.


Along with President Yoweri Museveni, Eritrea’s Isaias Afewerki and Rwanda’s Paul Kagame, Zenawi was described as one of a new generation of African leader by former US President Bill Clinton in the mid-nineties.

The sheen has come off this “elite” group of African leaders in subsequent years as they have come under attack for human rights abuses, less than perfect election wins and for sliding back into the big man politics blamed for the continent’s current woes.

If the eighties were Africa’s lost decade then one can understands the appeal for the “New Generation” of leader, men of action who were quick to embrace the changing reality of the post-cold war era by allying with western donors to jumpstart their economies, while demanding to retain the right to determine their own development paths.

Zenawi oversaw an economy that averaged 7.7% growth in recent years, diversified the economy away from coffee and beef to now include floriculture, beverages and car manufacturing and is now in the process of building the largest power dam on the continent that will generate 6000 MW of power on completion in four years’ time.

He proved a useful ally in the fight against terror sending troops into Somalia to root out Al Shabab.

Zenawi would never be mistaken for a liberal democratic. He tolerated no dissent, his government jailed the political opposition and harassed the press.

Nothing is black and white. You find not only that are there grey areas but that even those come in many shades of grey.

So this is the challenge of leadership particularly in our part of the world.

In an environment where there is little or no institutional capacity the incentive for one man to fill the void and become the alpha and omega is probably irresistible.

Driven by the ambition to do well by your people the temptation to paper over institutional failure with presidential edict in order to get things done, becomes the normal order of business, centralizing the final say in one man’s hands.

The net effect of this is that institutions are stifled while a powerful personality cult emerges.

In the development of the societies institutions became necessary as faceless, impartial arbiters of disputes.

So whereas previously it was just a group of  families hunting and gathering and therefore disputes could be settled face to face, settled on the strength of the mutual respect for an elder or recognized authority figure, in larger societies where kinship is not widely shared an independent arbiter whose authority is respected by the general society was required.

Zenawi was not blind to the issues of governance and maybe to the inadequacies of his own style of leadership —even if only on an intellectual level,

“We believe that democracy, good governance and transparency and fighting corruption are good objectives for every country, particularly for developing countries. Where we had our differences with the so-called neoliberal paradigm is first on the perception that this can be imposed from outside. We do not believe that is possible. Internalization of accountability is central to democratisation. The state has to be accountable to the citizens, and not some embassy or foreign actor,” he once told Peter Gil, author of the book “Famine and Foreigners: Ethiopia since Live Aid”

The challenge then is how does one build institutions? The experience even here in Uganda is that effective institutions cannot be written into existence. To be effective institutions have to backed by the potential to censure offending parties.

In a situation like Ethiopia where Zenawi straddled the political scene like a colossus institutions were unlikely to flourish. Even the best intentioned of leaders faces this dilemma.

And this where the tension lies. Human nature is such that we cannot and should not allow power to be centralized in a single individual however much they act in our best interests, the challenge is how do you prevent this from happening?

Those waiting for a quick and ready solution will be sorely disappointed.
 
The history of the world shows that the process of evolution from the rule of the personality cult to more inclusive government is a long one taking generations even centuries of contestation between various often evenly matched power centers, to materialize into the form we are now familiar with in western democracies.

Zenawi’s legacy shows that the days of pigeonholing African leaders into ogres or saints are long gone and in judging their achievements be prepared for brain wracking ambiguity.

UMEME; A PRIVATISATION CASE STUDY

Umeme is the messenger we love to hate.

At the tail end of the electricity value chain, Umeme has borne the brunt of the criticism for the inability of power generation capacity to keep pace with our insatiable demand for electricity.

There was a time when the then Uganda Electricity Board (UEB) used to generate and distribute 60 MW and people probably don’t remember loadshedding as an event, since supply was infrequent and unsteady.

Attempts were made in the 1990s to add some generation capacity – the then Owen falls dam’s capacity was increased to 180 MW and the network got a partial overhaul. We even  built a second 200 MW dam that never quite lived up to the hype. But the economic growth of the nineties meant that supply was inadequate and loadshedding entered our vocabulary.

As a response to these shortcomings in the sector government broke up UEB into its generation, transmission and distribution arms. The idea was that by breaking it up we could bring the benefits of specialization to the industry and therefore greater efficiency.

The government sold off the generation business to South Africa’s Eskom and the distribution to a consortium led by the Commonwealth Development Corporation (CDC).  Actis Capital a spinoff of CDC later took over Umeme.

"Since it took over the business accounts have jumped by more than half to 458,000 at the end of last year from 292,000 in 2005, while the Umeme has invested almost $150m over the same period....

The largely dilapidated distribution network Umeme inherited notwithstanding a general lack of power hampered their operations. With the coming onto the grid of the Bujagali’s 250 MW Umeme has suffered fewer arrows in its back.

Looking back the privatization of the government’s distribution business ranks next to the banks, the breweries and hotels as a success story, in terms of getting the service to more and more clients and returns to government.

Its still early days but adding more than 200,000 consumers to the grid more than the government parastatal did in 40 years, collecting virtually all the money billed  compared to one in every five shillings going missing seven years ago and paying sh21b into the treasury last year are not achievements to be smirked at.

The private sector works where parastatals fail not because of the poor quality of the management but because of the different incentives to the respective managers.

The public sector manager can get away with running a loss making corporation as long as services are delivered to an acceptable level often in support of a political over a commercial objective. So public corporations provide a service, often times inefficiently at a low cost that cannot cover expansion or maintenance of equipment. And if the corporation is not a monopoly it locks out competitors with its artificially low tariffs.

The private sector manager on the other hand is not only supposed to extend his service as widely as he can, winning more market share, he has do it efficiently so the business can be profitable – he has to maximize revenues while managing costs.

"While both managers are interested in keeping their jobs the private sector manager does through growing the business sustainably while the public sector manager keeps his shirt by kowtowing to the powers that be regardless of the quality of service delivered...

Of course there is a need for government regulation, to save the private sector from its own excesses and even some strategic intervention, for example investing in sectors that may not show a return for the private sector in an acceptable time.

But government should make these investments with a view to selling them off to allow private capital to maximize their potential.

The concession still has more than a decade to run before it expires and we can expect Umeme will be looking to extend its reach at the least cost possible to itself and therefore its clients to ensure the viability of the business.

However sector players anticipate that the approximately 70MW surplus the country is now enjoying will be wiped out within a year and a half, barring any new power generation coming on line and we will be back to loadshedding.

The pressure now should be on the Electricity Regulatory Authority (ERA) to ensure a conduicive environment to attract more investment into the power generation sector.

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