Speculative Financiers: Why You Must Read Between the Lines

 Michael Musau

Finance is probably the most abused field in history; it has been blamed for many evils in the world from the old Shakespeare days in the 15th Century, to the emergence of empires in the centuries that followed.  Shylocks, the purported predecessors of modern day banking system were blamed for executing defaulters. Nations went to war to either tap into additional financial resources to investing excess wealth.  Then entered modern day capitalism; the bond market was born, STOCK MARKETS thrived and sophistication became the order of the day.  More nations got born out of this while others almost collapsed from absorbing more sophisticated debt for shorter term obligations. 

Over hundreds of years, a lot has changed in the world of finance but two things remain unchanged in terms of accessing capital for your business- the patient option (equity) or the impatient option (debt). The same applies to governments. Everything else, no matter how complex it seems, falls within these two.

Recent happenings that seem to ride on the sophistication in the industry seem to suggest that money grows on trees; by creating models that seem to confuse and extort the little left from struggling operations, and poor African governments only too desperate to cash in on promised wealth. I have come across not so smartly dressed men in the small city called Nairobi who claim to have funds for companies. It mostly comes in millions of DOLLARS with the promise to deliver the millions within a few months, with no set rules for the projects to be funded.

Seven years ago, I met a gentleman of Canadian origin; an East African national though.  I was young and excited by the fact that we could be their exclusive agents to source for SMEs to fund. He said that he had the money, and he’d give it to companies for free; if such companies provided a 10 percent proof of funds.  I did not read between the lines despite the fact that I had worked at a bank and knew that money never came that easy.
I recruited would-be clients from every sector; from real estate - the majority, oil & gas, manufacturing, logistics to agriculture and agribusiness. Months passed and we pieced the prerequisites together; a local bank, a legal firm, paper work and site visits.  It was involving and tiresome.  The only thing that seemed odd about the arrangement was that none of the projects got turned down, even when documentation was weak. 

My Canadian partner introduced me to his partners; the bosses of the company who had the money from Europe. They looked like it, dressed like it, spoke about billions ‘on trees’ and promised to deliver in due course.
We waited and months passed with no sign of getting any funding. It was my cue to leave when the investors STARTED asking for money from clients; to pay technical people or get registration or just because they could ask.
Fast forward to 2015, a newly formed company recently told me that they had funds to give to SMEs, and they were looking for companies that could absorb between US$ 20million and US$ 200million and had up to a billion US dollars to give to companies. The rule was that such companies proved that they could raise up to 20 percent of the required funds.  I decided to give it a hearing not because I saw a possibility of FINANCING the many needy companies but because I did not think that such scams still existed.

And just like the story seven years ago, the company has been able to recruit tens of SMEs and promised them funding--total amount of funds totaling to US$1billion plus.  It is mind boggling.  So, just like the story before, the financiers came, met the clients who are SMEs; demonstrating hope that their FINANCING constraints had finally come to an end.  I have tried to be as candid as possible and explained a few facts:
First, money does not grow on trees. The World Bank or some of the largest funders have not financed companies to such magnitude even over a 5 year period. Second, there is no individual or institution that will give millions of dollars without conducting thorough due diligence on the companies being financed, and even when they will, no sane person with money will give it to a new comer to just disburse it.  If they chose to INVEST in Africa, they’d channel their money through already established networks and platforms.  So, please get it in your head; there is no free money for SMEs.

Finally and more important, there is no new thing under the sun when it comes to funding. Institutions with money have rules, and all rules are on paper. And whether they are new or old, their names are out there. People are talking about them and the story is consistent and adds up. There are many inconsistent stories, and they are out here preying on companies. They will waste your time, take money from you or waste time and still take money.

So how do you know that you are falling for such scams? It is evident that such financiers will not oppose any suggestion on how you want to have your FINANCING structured- everything is possible. In addition, they like working with puppies who they can fool and follow them around.  Such can easily be manipulated because they are too ignorant to read between the lines. They can recruit clients without fear of being bashed or questioned as the boss becomes increasingly invisible and difficult to reach.  The financier in this case does not have a written rule or procedure; everything is explained in person and hardly on paper, they are opposed to write emails or respond to hard questions.

Now, all that said, your question still remains; where will money come from to fund your growth as an SME?

History tells me that the best and easiest platform to get the funds from is always the banks. Compared to the alternatives, your bank is the easiest place to GET FUNDING.  The problem is that most SMEs too often ignore the rules. With a good banking history, any good relationship manager -- and most of them are -- will help you come up with alternatives when you do not have adequate collateral.  But a bank will first want to see a good activity in your account for some time. This can only happen when you are patient.

If you have a good business model, it also goes without saying that the transaction history will be a good testament for this.  But the moral of the story is, as soon as you START your business, open a bank account, develop a relationship and transact; consistently, organized and disciplined- the relationship manager will love you and support you. If the repayments on your first facility or loan are on course, then you’d be able to attract patient financiers over time. But the basic rules have to be maintained, because they’re the rules that will not change in a long time.

Carbon Dioxide Suffocation: A Global Threat

Sulay B. Conteh

When we talk of global warming, the first thing that comes to mind is carbon dioxide (CO2). The emission of CO2 is the main cause of global warming, followed by the emission of methane (CH4), the emission of carbon-floro-chlorides (CFC) and direct heat release into the atmosphere from various heating sources including volcanoes and power-generating plants. In fact, most heat-generating sources are also global-warming gas generating sources; adding further to the complexity and severity of the global warming processes. Not only the rate of emission but also the rate of destruction of the sources of storage of global-warming agents today is unparalleled in history.
 
With industrialization has come unprecedented levels of population boom, land plundering for agricultural production and fossil fuel consumption to meet the never-ending human needs. While CO2 emission from fossil fuel combustion is fairly a direct chemical process with significant instant effects, CO2 storage by plants (notably forests) and the oceans is a fairly indirect biochemical process that takes decades if not centuries to realize meaningful storage. There is also the so-called CO2 capture and storage or disposal into the earth. While CO2 capture is largely limited to stationary emission sources such as power-generating plants, geological formations suitable for CO2 disposal or permanent storage are highly limited. There is also the problem of prohibitive COST associated with CO2 capture and storage into the earth; which many companies and countries cannot afford.
 
The highly intensive emission of CO2 and extremely extensive destruction of the sources of CO2 storage are among the most disastrous concurrences for the survival and subsistence of the human race. Such concurrences only but worsen global warming that in turn increases the occurrence of extreme hydro-climatic and geophysical conditions with highly destructive and mass-killing capacities. Among the telltales of global warming are high temperatures, mass melt of polar ice caps, prolonged droughts, mass crop failures, high pest and disease incidence, mass species deaths, frequent cyclones, tornadoes, floods, hailstorms, dust-storms, solar-storms, El Niños, earthquakes and tsunamis, etc. Even in the face of the unprecedented on-going retreat of polar ice caps, resurgence of tornadoes, steady rise of sea level and the persistence of droughts due to worsening global warming conditions, the community of nation states still prioritizes economic growth over cuts in greenhouse gases emissions.
 
If you travelled to the developed and rapidly developing world, you would be shocked by the propensity of destruction of forest cover. This BECOMES even extremely alarming if you travelled during the off-season periods when over ninety percent of the cultivated lands lie idle and barren. Also vasts of lands that were once forests have been converted into settlements, roads, recreations and protected zones with virtually not forests now. Most surface water systems in the developed and rapidly developing worlds have been harnessed for the never-ending human needs, including domestic, industrial and agricultural needs. In the developed and rapidly developing worlds, it is not uncommon to see countless rivers without a single drop of water.
 
Man has so much so humanized the world that the consequences of over-modifying nature are now returning to haunt us in disastrous ways. It is high time we reconsidered our ever-deepening thirst for the so-called economic development. To break down our world will be a catastrophic event as the collapse of the world over us could completely wipe out our unique human race. So please take a step today to save the world and the human race by cutting down on YOUR emission of greenhouse gases and conserving the world’s forests.

State of The East African Community

H.E. Jakaya Mrisho Kikwete

A lot of progress has been made both in building the institutions of the Community and in integrating the region. No doubt the East African Community has BECOME a very strong institution both in terms of its organizational and institutional set up and in the functioning of its various organs and institutions. With regard to the integration process, a lot of ground has been covered and successfully so. It has always been a pleasure and an honour for me to share my thoughts with the distinguished Members of the East African Legislative Assembly about the East African community and the East African integration process. Let me state at the outset that when one looks back through the tunnel of history, one clearly appreciates the momentous achievements made by the East African Community to date.

 
Status of Regional Trade

In the Charter establishing the East African Community, it was agreed that the entry point in our integration process will be the Customs Union, followed by the Common Market, later the Monetary Union and ultimately the Political Federation. The Customs Union which STARTED in 2000 involved two things. Firstly, the free movement of goods produced in any EAC member state and secondly, a common external tariff. Goods are supposed to move freely across the borders of member countries without tariffs being charged and not encumbered by Non Tariff Barriers. 

It is heartwarming, indeed, to note that implementation of the Customs Union which STARTED in 2000 up to 2005 has been a success. Indeed, goods which meet the criteria of rule of origin have been moving across borders without paying taxes however non tariffs barriers remain a challenge.  Progress has been made but the matter has not been resolved fully yet.
These challenges notwithstanding, intra East African Community trade has REGISTERED phenomenon increase in this short period of 10 to 15 years. Trade is now at 23 percent, over and above intra African trade figure of 12 percent.  There has been a 300 percent increase in the value of trade from, 2 billion US Dollars in 2005 to 6 billion US Dollars in 2014.  These numbers, coupled with the combined EAC GDP of 110.3 billion US Dollars with an average annual rate growth, of 2.6 percent makes our region a formidable trade and economic block in Africa. At the same time government revenues have recorded an increase year after year from 89.55 percent of the target in 2010 to 96.86 percent of the target in 2013. During the discussions on the establishment of the Customs Union, the loss of government revenues was among the leading fears.  It has turned out different. One can, indeed brag to say, the EAC is next to none on the African continent.

We envisage more increased revenues when the Single Customs Territory BECOMES fully operational in the near future. So far, the piloting exercises are progressing well in all member states. Indeed, it has proven helpful in reducing encumbrances to importers and in discouraging dumping and diversion of transit goods. Ultimately, it will be an effective tool of promoting trade and curbing revenue loss to governments.

Non-Tariff Barriers

It is incumbent upon us, therefore, to ensure that all remaining non-tariff barriers to trade are removed in the East African region.  We all admit that we have done very well in eliminating tariff related barriers, we must resolve to do away with the remaining non-tariff barriers. Commendable work has been and continues to be done to address the transport related ones such as road blocks, weigh bridges and other check points on the roads as well as customs red-tape at ports and exit points. The progress made so far, at the ports of Mombasa and Dar es Salaam and, on the Northern Corridor with regard to road blocks shows that it is possible to eliminate these non-tariff barriers. Measures are being taken in earnest to reduce road blocks on the Tanzania side of the Central Corridor. I am sure in the NEXT few months we will notice a huge improvement.

Police check points have been reduced from 15 points to 6 points. Our aim is to reduce them to none except when need arises. Tanzania Revenue Authority checks from 3 to 0. Weighbridges have remained 8 but our plan is to reduce them to 3. We are introducing weigh-in-motion technology. One is already done at Vigwaza, two are on their way for Manyoni and Nyakahura. I am told with the current improvements alone, for a container to move from the port of Dar es Salaam to Kigali takes 3 days from the previous 8 days. It takes THREE and a half days to Bujumbura from the previous 8 days. 

I pledged during the 16th Summit that during my time as a Chair of the EAC I will give due attention to elimination of Non Tariff Barriers in the East African Community. I intend to follow up on this pledge. I would appreciate the partnership and support of East African Legislative Assembly in this endeavour. We must make the EAC region the best place to do business.

State of Regional Infrastructure

We must do everything within our power to reduce infrastructure related costs at the shortest possible time.  These are responsible, in a big way, to the high cost of doing business in our region.  It is estimated that, the cost of transport in our region is 4 to 5 times higher compared to the developed countries. It is estimated that it accounts for about 30 to 40 percent of the price of goods in the landlocked countries. INVESTING in better and efficient ports, railways, roads, aviation services, energy and telecommunication are things we must continue to do. 

At the 2nd East African Community Heads of State Retreat on Infrastructure Development and FINANCING held in Nairobi on 29th November, 2012, we undertook to close the infrastructure gap by 2020. I note with a deep sense of satisfaction, the ongoing work, both in the Northern Corridor and the Central Corridor in this   regard. The East African Legislative Assembly should regularly request member states to report on progress being made on the implementation of the outcomes of the retreat.

Let us be reminded that the full integration of the East African Community region very much depends on the success of these efforts. We must also know that the world we are in, and that ahead of us, has no place for fragmented markets, isolated industrial value chains and inadequate in country or cross border infrastructure. Work with the Council of Ministers to devise ways and means to secure INVESTMENTS and funding for East African infrastructure programs and projects.

The State of the Common Market

As stipulated in the Charter establishing the East African Community, the Common Market is the NEXT stage after the Customs Union. As you may recall, the Common Market Protocol was signed in 2009 and came into force in 2010. This Common Market is what answers the very question about movement of people, capital and services within the region. The feedback from the East African Community Common Market Score Card 2014 presented at the last East African Community Summit in Nairobi shows that progress is not good enough. For example, with regard to the Free Movements of Services, 63 measures out of 500 key sectoral laws and regulations of partner states were identified to be inconsistent with the Common Market Protocol.73 percent of these are exclusively related to professional services. 

With regard to movement of goods, a lot has been done apart from non tariff barriers related to sanitary and phytosanitary measures.  In terms of movement of capital, only 2 out of 20 capital operations are free of restrictions in all partner states.  These TWO are related to external borrowing and repatriation of proceeds from sale of assets.

The score-card reminds us that partner states are behind schedule in reviewing and amending national laws in accordance with the Common Market protocol. It impedes progress in the implementation of the Protocol and the East African integration process. We agreed at the recent Nairobi Summit that we should do more in our respective member states on the implementation of the findings and recommendations of the score-card. We should help overcome embedded resistance and nationalistic sentiments. 

I appreciate the fact that, there are Bills that will help advance the building of the Common Market. I have in mind the East African Community Cross Border Legal Practice Bill (2014); the East African Community Electronic Transactions Bill 2014; and the East African Community COMPETITION (Amendment) Bill (2015). 

Peace, Security and Stability

Ours is a regional integration undertaking derived from historical lessons of the defunct East African Community (1967 – 1977). Also, from the gains made by  the Tripartite Commission on East African Cooperation (1996-1999).  We all know what contributed to the demise of the previous EAC.  It is not my intention to dwell on the narration or the reasons and circumstances of its collapse.

When conceiving the new Community we all agreed that we should not repeat the mistakes of history neither be prisoners of it. We also agreed to move cautiously making every step we take the building block of the next. Indeed, we STARTED with the Tripartite Commission on East African Cooperation in 1996 and later in 1999 graduated into the East African Community. 

The principle of growth by stages is well enshrined in the Charter establishing the East African Community.  We have remained faithful to this principle. We STARTED as 3 members; we are now 5, with a provision to others to join if they meet the terms and conditions. Among the terms include sharing a common border with a member of the East African Community and subscribing to the ideals of the East African Community. So far, South Sudan and Somalia have applied.

Subscribing to the ideals of the democracy, good governance, human rights and rule of law are critical tenets of the East African Community. We all agree that better governed member states contribute to a prosperous region. It is also true that badly governed member states frustrate the integration process. It impedes trade, cooperation, as well as movement of people, goods, services and capital.  Moreover, it deters INVESTMENT and makes the region unfavourable destination for investment and trade.

Peace, security and stability must and should continue to be high on our agenda. I am happy that our region is peaceful, secure and stable.  Democratic values and institutions continue to take root and shape in our countries. This year we will be having elections in Burundi, and a Referendum on proposed Constitution and General Elections in Tanzania.

The people of East Africa should join hands in wishing these TWO countries success in these important undertaking.  Let the elections be credible, free and fair which abide and respect the constitutions and the relevant laws of these countries. Let them come out of these processes, peaceful and united as a nation and a people.

Burundi

To my Burundi brothers and sisters, let me say that I am aware of the anxiety over the electoral process ahead of you.  There are whispers and fear that this great country may lose the prevailing peace and stability garnered over the last decade and a half. There could be violence, some say. Honestly, that fear all of us and we dread the idea of violence coming back to Burundi. God forbid.

In my view, there are ways of doing things right and avoiding political instability and violence. The leaders and the people of Burundi should do the following:

1)Respect the constitution of Burundi and the Arusha Peace Accord to the letter and spirit. In the same vein respect the Electoral Laws of Burundi.

2)Desist from resorting to violence to resolving YOUR problems. That may land your country into bigger problems.

3)Use dialogue as much as you can. There are so many wise men and women and institutions to enable you do that.

4)Involve the laws of Burundi when you feel the constitution or the electoral laws have been violated.

We all have trust in you that you will rise to the current challenges and overcome them. You have been able to manage even more challenging situations than this. I do not see why you should fail this time. Pluck up courage, muster political will, everything will fall into place. I want to assure you that the EAC stands ready to assist.  We will walk with you all step of the way as we did in the past.

Our region is not without security challenges.  The fact that we are surrounded by other countries and regions in conflict, poses a security challenge to our region.  Therefore, we cannot avoid keeping our eyes on them and being of assistance when need arise.  It is in this regard, our region is involved in the DRC, South Sudan and Somalia.  We must continue to assist these TWO nations. It is in our best interest to do so since all of them are potential future members of the Community.

Terrorism and transnational crimes are security challenges facing our region which require a regional response for effective control and success. I am glad that efforts are ongoing at regional level to address these challenges. There is closer cooperation between the defense and security organs of our respective countries. They share intelligence and undertake joint or coordinated actions.  This is very much welcome and we should encourage it. It is important that our region remains seized with the peace and security agenda, for it determines the sustainability and future of the EAC.

Role of EALA

EALA  is ONE of the important pillars of our Community. It is the organ that carries the voice and aspirations of our people. This is where people’s interests are raised, aggregated and translated into laws.  Since ours is a people’s integration, then EALA is at the heart of our integration endeavours.

I commend the good work being done by this House. This is amply evident.  The Bills passed by this House give life and meaning to our integration aspirations.  It could not be possible for the EAC to achieve so much within this short period of its existence without the good work being done by the EALA. Many of the Bills passed by this House and Resolutions adopted have contributed immensely towards advancing the EAC integration process.

EALA must continue to be people’s Assembly and their first point of call.  EALA must be seen to be spending more time deliberating on issues of concern to the people of East Africa and not otherwise. EALA must give prominence to issues which are regional in character rather than trivial national interests. We must see that East Africaness spirit in EALA.  I appreciate the efforts that EALA is doing in reaching out to respective National Parliaments, governments and various interest groups. 

East Africa Court of Justice

I am glad to report that another historic milestone has been laid with regard to the functions of East African Court of Justice.  At the 16th Summit of Heads of State of the East African Community held in Nairobi on 20th February, 2015, we adopted and signed the Protocol to operationalize the Extended Jurisdiction of the East African Court of Justice. The extended jurisdiction covers trade and INVESTMENT matters, as well as issues associated with the East African Monetary Union.  This is yet another important avenue to the East Africans to access justice and reap more benefits from their Community. It consolidates the integration process.

Way Forward
  Integration is not a one off event. It is multifaceted. It takes time. As such, patience and understanding is absolutely important. Otherwise, we may end up making mistakes which could be avoided. We must remain steadfast and focused on deepening and widening East African integration. Trade indicators and statistics confirm that this is happening steadily. However, we must not be complacent. We need to do more in many ways. Allow me to mention TWO things of interest. One, we must increase the pace of the implementation of decisions and agreements of the various organs of the Community.  Recent reports show that, implementation of these decisions and agreements stands at 75.8 percent for Kenya, Rwanda at 75.7 percent, Tanzania at 66 percent, Burundi at 56.5 percent and Uganda at 48.1 percent. At the last Summit we agreed to urge ourselves to ensure speedy implementation of the decisions we make and agreements we sign. We also applauded the idea to institutionalize mechanisms of tracking the implementation of decisions and agreements reached.

Second, we must promote ownership of the integration process by the people of East Africa. As a matter of fact, the future and sustainability of the Community very much depends upon how far we succeed in making people of East Africa feel that they benefit from the East African Community. The State of East Africa Report – 2013 by Society of International Development (SID) provides us with some important insights. It suggests that the future of the region will depend on how we make growth inclusive and on narrowing the inequality gap within nations and in the region. Certainly, the answer lays in the deepening of integration and increasing INVESTMENT and trade which have proven to be good catalysts for promoting prosperity and improving welfare of the people.  Integration is the best way forward, for no one country can overcome these challenges alone. I urge this Assembly to make its requisite contributions to advance the cause of integration.

Conclusion

We are all witnesses to the fact that a lot of progress has been made in our integration process. What we have been able to achieve in this short period is truly amazing to us and the world at large. The pace and depth of our integration process has been phenomenon. We have demonstrated to the world that integration process can actually happen in Africa.

Therefore, the East African Federation and United States of Africa are not a mirage or distant dreams. They are possible and doable. For us Tanzania, with 50 years experience of the Union between the then Tanganyika and Zanzibar, we know it is possible and doable. We believe in it, we are living it and we look forward to live as East Africans in the East Africa Federation and, ultimately, as African citizens in the United State of Africa. Let us remain committed and steadfast in pursuit of these noble ideals. Nothing is impossible.  It can be done play YOUR part.

S. Sudan Conflict: IGAD Must Go Back to the Drawing Board

 Nkwazi Mhango

Power sharing has become another means of elucidating differences between opposing powerful politicians in Africa. However, President Salva Kiir Mayardit of S. Sudan said categorically that he's not ready to share power with his nemesis Dr.  Riek Machar. Mayardit was quoted saying, "I don't agree with the suggestion that Riek be given the position of vice president." He also disagreed with the idea of having TWO armies that was proposed by IGAD.

Mayardit’s new move has brought a cudgel to the peace talks that have been going for 15 months since the conflict erupted in this new and young nation. To jumpstart the talks so that they can move forward, IGAD needs to tweak its proposal to be acceptable for both sides. For those who know how power in Africa is, having TWO armies in one country is like being at war. It is an expensive and unenviable option. It can't work for the president and vice president to have independent armies under their disposal and commands in one country. It has never been tried anywhere in Africa. So if IGAD wants to help S. Sudan, it must come with applicable and practical and possible solutions.

Even sharing power itself is questionable due to the nature of the conflict in S .Sudan. Essentially, IGAD needs to peel the onions by observing the hidden layers of the conflict. What is being seen currently is but the tip of the iceberg.

IGAD should think out of the box by analyzing the conflict in South Sudan. IGAD must consider all situations from the history of S. Sudan, realpolitik and geopolitics of the day. For, instance, when IGAD proposed that the TWO must have two separate and independence armies, it forgot that N. Sudan would seize this opportunity to arm one against another. In this conflict, it is obvious and clear who would be armed. By doing so, S. Sudan would embark on an arms race between the president and his superimposed vice president. The army is an integral party of the executive and must be owned totally by the president who is the Commander- In-Chief. There is no way there can be two C-I-Cs in one country.

IGAD needs to underscore the fact that the Government of Nation Unity (GNU) is not a magic bullet that can fix all problems. If I were to be consulted as an academic and professional in the field, I would recommend that there must be ceasefire first. Secondly, I'd argue that the UN peace building mission be sent to S. Sudan to see to it that the already secured volatile peace does not evaporate. The presence of Green Berets may change the whole situation apart from being able to contain the conflict so that it can be easily managed.

Mayardit is dead right for refusing to allow another army in his country or sharing power. Having TWO armies will exacerbate the conflict.  Apart from undermining the power and the office of the president, having two armies will create more mistrust and muscle flexing depending on who has what it takes. Such a move will be utilized by spoilers in the region to see S. Sudan become a failed state or pariah. Remember. S. Sudan has black gold that can easily allure even those you don’t expect to be in the big picture.

The conflict in S. Sudan is also about relationships. Instead of looking at what the duo wants, ONE needs to know the history of their relationship. IGAD needs to know how much these bedfellows offered to each other. IGAD should avoid a quick shot based on securing a signed agreement. Instead, it must allow what John-Paul Lederach, who is a renowned among Peace and Conflict Scholars calls going “sideways” to find a solution out of the prescribed template. Mayardit and Machar must be told that violence will lead to more destruction and intervention of regional powers to the detriment of Sudan.

Kenneth Kaunda: The Missing Legacy

Munyonzwe Hamalengwa

Kenneth Kaunda                           P. Courtesy

There is a West African adage that says that “when an old man dies, a library burns to the ground.” Old people are generally the storage of knowledge which is rarely recorded. In the western world, a lot of leaders leave that knowledge through autobiographies or biographies. 

Kwame Nkrumah may have been propelled by the adage because he wrote a lot that is now common heritage to humankind and Ghanaians have a reference point to their evolving history.  Nigerian leaders have also obeyed the adage. Olusegun Obasanjo wrote like there is no tomorrow. So did Nnamdi Azikiwe. Obafemi Awolowo’s website is impressive in terms of what he wrote about his country and his struggles for independence and to keep NIGERIA together.

Down South, Nelson Mandela left a legacy of knowledge through his writings. South Africans will never be left wondering what Mandela did or thought, who he dealt with and for what and how South Africa benefited from the existence in South Africa of a man named Mandela.

First generation leaders wrote a bit about their struggles for independence. For example President Kaunda wrote his Zambia Shall be Free; Jomo Kenyatta wrote Facing Mount Kenya;  Oginga Odinga wrote his riveting Not Yet Uhuru. In Tanzania, Julius Nyerere wrote more about his plans for economic development and  the philosophical underpinnings than the others in East and Central Africa. He was closer to Nkrumah in terms of leaving a legacy of his thoughts.

In terms of autobiographical legacy, Mandela may be the top African leader to bestow his people of this knowledge that cannot be obtained in any other way about the man other than the man himself. What is impressive about Mandela is that he wrote his autobiographies before, during and after his tenure as president.

Zambia is marked by the poverty of the writings of its leaders. There is a serious danger that we will never know what made President Kaunda to tick and what motivated him to sacrifice the economic and political survival of Zambia by his support for the liberation of Southern Africa.How did Kaunda manage all the pressures from the British, Americans, Chinese and the Soviets? How did he manage to construct the ideology of humanism? What are its origins and philosophical underpinnings? Where did he GET the idea of tribal balancing and how deep it was? How exactly did he negotiate the survival of Zambia in that turbulent region for 27 years? Did he ever think of resisting the transfer of power despite the loss in 1991? What has life been like since he left power and living under the presidencies of Chiluba, Mwanawasa, Banda, Sata and Lungu? What legacy does he think he will be leaving Zambia with?  If he was given a second chance to rule Zambia, what would he do differently? So many people have raised all types of questions about Kaunda’s governorship. What would be his answers?

Mandela wrote many books in the short time that he lived after jail.  Our President ruled for 27 years and has been out of power for 24 years. There is a lot that could have been written to leave a long lasting fount of knowledge for Zambians, a legacy of knowledge that cannot be obtained anywhere else.  Others have written about Kaunda but it is not the same kind of knowledge as that which would be expounded by the source himself.  The Post newspaper put out a 90th birthday commemorative issue in  2014, to which  I was privileged to contribute.  A lot of contributors broached interesting subjects to which only Kaunda can expand on.  Zambia is thirsty for the knowledge about their first president. The Post used to carry Kaunda’s reminiscences and they were fascinating but they are now difficult to access if they still exist at all. Maybe a collected reminiscence of Kaunda as previously published by the Post can be put together.

Hopefully Zambia will not continue to live in drought.  Some leaders have contributed significantly to the personal experience knowledge of Zambia but we need the source himself to quench our thirst.  Vernon Mwanga stands at the top of leaving a legacy of knowledge for Zambia. He has written autobiographies or aspects of his life in such books as An ExtraaordinaryLife ( volume 1 and 2); The Long Sunset; The Other Society  among others.  Simon Zukas has also written, Into Exile and Back.  Sikota Wina’s Night without a President is unequaled;  Mwanakatwe has written a fantastic autobiography, Teacher, Politician, Lawyer: My Autobiography;  Alexander Grey Zulu, the closest to the seat of power in Zambia under Kaunda has written a useful autobiography, Memoirs of Alexander Grey Zulu. President Chiluba wrote quite a readable albeit not comprehensive book constructed initially as an academic project entitled, Democracy: The Challenge of Change.  Amos Malupenga has written about Mwanawasa. Charles Mwewa has written about Michael Sata.  A biography is different from an autobiography.

Kaunda re-launched his pre-independence autobiography on March 6th, 2015.  Given the interest shown in that publication by the Zambian masses, it is clear a full blown autobiography mapping his life from 1964 to PRESENT, will be a monumental legacy for Zambia. The West African adage of “when an old man dies, a library burns to the ground” is a real prospect for Zambia.

China-Africa Relationship: Is it Really Win-Win?

Okwaro Oscar Plato

Is China carrying the master-key that will finally unlock Africa's economic potential, or is the giant dragon a menace to Africa's development? It's just over seven years, since China unveiled its new policy on Africa, heralding the re-awakening of the sleeping dragon on the continent.

The symbolism of the timing couldn't have been more significant: The announcement coincided with the 50th anniversary of the first diplomatic ties between the "world's largest developing country and the continent with the largest number of developing countries."

This was followed by a summit of African heads of state in Beijing, where the leaders signed a declaration establishing what they described as "a new type of strategic partnership."

President Hu Jintao, the paramount leader of China between 2003 and 2013 in the summit unveiled the $1 billion China-Africa Development Fund (expected to rise to $5 billion) aimed at promoting economic cooperation between Africa and China "by investing directly in Chinese enterprises which have set up operations in Africa or plan to invest in Africa." The massive package also included concessionary loans, financial aid, and some debt cancellation.

Since then, the emerging superpower has become a dominant force in Africa. From South Africa to Sierra Leone, the red dragon's footprints can be found in almost 50 of Africa's 54 countries. In the last four years, China has given more loans to Africa than the World Bank. In the past decade, trade between China and the continent has increased more than six-fold to $130bn in 2010, making Africa China's largest trade partner. This "investment" is expected to be US$210bn in 2030.

It seems China is open and unapologetic about its strategic objectives in Africa. It is hungry for Africa's natural resources and has already secured deals for oil, minerals and trade amongst others. As well as its declared interest to tap into Africa's unsaturated markets for its manufactured goods, Beijing is also seeking to expand its global influence with the diplomatic help of African countries. If further evidence of China's statement of intent were required, then it came in the form a magnificent $210 million African Union (AU) headquarters in the Ethiopian capital Addis Ababa funded and constructed by China as a gift to the AU.

China is also deploying massive human and capital investment into infrastructure developments in several African countries. At present, Ethiopia, DRC, Kenya, Ghana and Sierra Leone are all beneficiaries of major road projects supported by China. However, while China's renewed activities in Africa have been applauded by many African leaders as an alternative to Western economic and political dominance, not everyone is comfortable with the so-called "partnership."

Indeed what China is doing in Africa now was similar to what Britain had done 150 years ago. During a visit to Tanzania in June 2011, US Secretary of State Hillary Clinton weighed into the debate, warning of a creeping "new colonialism." Without mentioning China, she said "African leaders must ensure that foreign projects are sustainable and benefit all their citizens, not only elites."

Almost all African nations got independence from foreigners less than 100 years ago. Before that, colonizers followed the same path the Chinese are following today to get into Africa. The Africans allowed the foreigners to settle in their nations the same way they are doing to the Chinese. When a reasonable number of the foreigners settled, they colonized the owners of the land.

The rate at which the Chinese are settling in Africa, indicate that there is a possibility that in the next 25 years, there will be more than 500 million Chinese in Africa. With the help of China, which is currently very powerful economically, the number will be large enough to “colonize Africa for the second” time and with great ease. But some Africans will argue that Africans are poor and they need help which they are now getting from China.

Then one big question comes, "why abandon the west"? There is no doubt about the concerns of the west regarding the undemocratic practices and human right abuses in most African Nations. African leaders are fleeing the west to China, to escape the enormous pressure from the west to end the dictatorship, human rights abuses and the rampant corruption which have seen many Africans languish in poverty. African leaders have found a sanctuary in China, where they can hide their skeletons.

For many years the West continued to give Africa a lot of assistance and hosting millions of Africans, who in return sustain the economies of their home countries. It is the reverse now with the Chinese who are being exported to Africa sending back millions of dollars from Africa, most of which is the loan given out to African Nations by China.

Africans continue to enjoy the green card program from the West and if denied this privilege today, there will be a very great effect on the African economy and hence a higher increase of unemployment. It is therefore inappropriate for Africans to embrace the political marriage between their leaders and China and at the same time run to the West to seek help to stop corruption and human rights' abuses in their nations.

The Chinese influx in Africa is part of the New World Order where there is a struggle for global supremacy economically and access to Africa's raw materials. China has overtaken Germany as the world's biggest exporter and they are on their way to being the world's largest economy - all the more reason why they need Africa's raw materials.

Furthermore the Chinese "interest" in Africa is purely for the survival and economic interest of the Chinese but not the economic emancipation of Africa. It is another form of imperialism/colonialism similar to the Western model.

Kenya and the Fragile Building ‘Terrorism’

 Kosta Kioleoglou

If someone would review the number of buildings that have collapsed in Kenya within the last few years, he or she would conclude that Kenya is within a strong earthquake radius. Surprisingly, Kenya has no serious earthquake history. In fact, no earthquake has been recorded in the last few years, and if any, none could cause any building to collapse. According to expert surveys’, the scariest thing is that, thousands of buildings across the country would collapse in case of an earthquake.

Although every society has its own problems, and Kenya is not an exception, yet the very recent challenges of buildings collapsing in various locations have been giving the various arms of government and the people of Kenya sleepless nights in view of the enormous loss of huge INVESTMENTS in housing, properties and human life. The major challenge on the issue of building collapse is that individuals differ radically from ONE another on the professional to blame as the major cause of the collapse of a building.

Over the last six years within Nairobi and other major towns, a number of buildings -- some under construction and others completed -- have collapsed. The collapse of buildings under construction has exposed the ills that bedevil the building sector. The frequent collapse of structures in Kenya leading to injuries and deaths is a matter of great concern. These construction site accidents which are avoidable have claimed the lives of innocent Kenyans, robbing families of their breadwinners and loved ones, causing irreparable damage to the injured workers and people who eke out a LIVING TRADING around the construction sites...

Kenya’s real estate industry has been growing with an amazing pace for the last 7 years. Developers and contractors have been making a fortune building houses for the Kenyan population. All over the country we can see big, fancy, amazing 3d signs advertising unique, comfortable, safe luxury apartments and houses for sale. In reality though, the average property delivered by the developers and the contractors is far below any basic quality standards. It doesn’t require someone to be an engineer or a market professional to realize when you stand in front of a building that is under construction that everything is happening very fast, without procedures and standards. Most of the personnel have no experience at all. Contractors hire workers using only one criterion; the cheapest qualify!!! There is no training involved, no safety control and no quality control.

The materials used to build also are chosen with the same criteria. Keep the COST as low as possible, maximize the profits. Contractors who steal cement and use less steel are to blame for most of the building structural weaknesses. Architects and engineers also add to the exposure by failing to verify the quality of the works. Poor design, cost cutting and lack of quality controls are factors that may lead to structurally unsound buildings.

This business model has THREE main effects.

At first there are no minimum safety standards at the building sites, that is causing the injury and death of hundreds in the building sites. People who are risking their lives in order to make a few KES per day , working for 10 hours, without taking breaks, without using any safety equipment. The only thing that someone can see are the plastic “safety” helmets that everyone is wearing, but even those are the cheap made in China for 100 kes per piece that will not protect you in case of an accident.

Secondly, the low quality materials combined with the use of only low quality workers, is producing very low quality buildings. That has several consequences for those who decide to buy or let a house, apartment or even an office space. Every year several buildings are collapsing all over Kenya, not because Kenya is suffering from strong earthquakes or terrorism attacks. The reason is that Kenyans have to live daily with the terror that any building could collapse any time, for no reason, just because of the way it has been constructed. That is the real terrorism that Kenya has to face. The Architectural Association of Kenya (AAK) recently published a report  claiming that more than 65 per cent of buildings in Nairobi’s densely populated low-income neighborhoods are not fit for human habitation. Even the buildings in high end areas which are sold for crazy money also do not provide quality standards. No ONE dares to say something about it to stop this disease that is causing the death of so many people around the country.

Last but not least, the third effect is maybe the one that will sound more interesting for most of those who are involved with the real estate industry. Low quality equals to guaranteed low prices and low income created by your investment. For buyers, the fraudulent and shoddy work has a cost implication, as reworking newly built homes often result in contractors and developers adjusting their prices to maintain and ultimately pass the additional costs to end users. The market in Kenya was mainly operated with off plan sales. Investors convinced by the developers have been buying off plan apartments or houses, speculating that they will be able to rent them and cover the initial investment plus producing a MONTHLY INCOME. In most of the cases, investors do not really care about the quality provided as they are not planning to stay there with their families. But when the moment comes to rent and they ask large amount of monies for rental, the interested party to rent is pushing for prices to go down or even decides to choose another place due to the low standards. On top of that a low quality construction will require a lot of money to maintain it, as problems will appear very often.

Before you INVEST in any real estate project you should know that all markets fluctuate, and sometimes prices go down. A bad quality product will lose in value faster than a good quality product. I will use an example from the Kenyan car industry. A used car, driven locally usually sells for half the price of an identical car driven abroad. Why? Simply because the one driven here has suffered a lot and has not been properly maintained. The same rule applies for the properties. Another issue that lots of investors do not know is that every landlord has liabilities against the tenants. According to the Kenyan law, The Landlord is under an obligation to provide a safe premise to tenants under Occupier's liability Act Chapter 34 Laws of Kenya Section 5.That means in case of any accident, the landlord has all the responsibility. It also means that, when you buy a property, you have to make sure that what you get is what you paid for.

Officials from the National Construction Authority are travelling around the country and inspecting building projects. The NCA says it has forced 500 such projects to suspend work since August. Some of the closures were for safety reasons, others due to poor quality building materials.

Buildings are going up so quickly across Kenya that inspectors cannot examine all of the construction projects. I want to believe that when they do find illegality, they order the work stopped or even require the building destroyed.

I happen to be a very realistic person, therefore, I cannot forget the fact that corruption has its own role in this industry. If 500 projects have been suspended since August, it means that the number of the actual building projects who had issues are thousands. It is not a secret that obtaining a planning permission in most of the cases does not include as much checking of the actual plans submitted as required. It has to do with negotiating the “price” of GETTING the planning permission granted according to the developer’s convenience. After the planning permission is granted, things are easy. Buildings are coming up with an amazing pace. This makes it impossible for the NCA to constantly check each and every building site.

The key question is, ‘what are the Kenyans really expecting to happen in order to START taking some action and protect their interest and their lives?’ How many people have to die, how many kids have to get injured, how many workers have to become disabled, how much money they should lose to activate them….

Always, people like to blame the government and the authorities. This is the easy way to make you feel better. The truth is, everybody has his own responsibility for what is happening.

Every time we take a bribe, every engineer who is signing or approving plans without keeping the standards, every developer who is saving in quality and safety, every worker who does not care about the job he is doing, every contractor who cheats in materials, every INVESTOR who is buying and doesn’t care to follow up with the quality provided, every buyer who is not taking to court a bad developer, any tenant who doesn’t stand up for his rights, everyone who compensates with low standards of living, we are all part of the problem.

The big picture is that this is part of a non-sustainable and unhealthy real estate market.It is a market where people do not see anything in the long term and try to maximize returns only in the short term.

Today we have a market that is ready to sacrifice, from the life time savings of a family up to the life of a kid or a worker, as long as someone is MAKING MONEY. If tomorrow we will have a recession, and the property market collapses, Kenyans will be left with nothing but lost dreams, financial losses, bad quality buildings, poor infrastructure and without any basic standards that could give hope for a quick recession. Only then that they will realize it’s too late to do anything. 

Kenyans deserve to make Kenya a leading country in the region and in the world. In order to achieve this, they should START from building a healthy environment in the heart of the economy which today happens to be the Real Estate. Providing not luxury, but at least safe and decent standards of living and working. Minimizing and isolating those who only care for their own profitability at any cost and do not care about the common interest and the country’s future.

Also, the Architectural Association of Kenya, the Board of Registration of Architects and the Quantity Surveyors of Kenya need to lobby county governments to reform the buildings approval processes. They also need to sensitize the public on the importance of using the right channels in the building sector.

At the end of the day, “Knowledge is Key. “

UK-Africa Policy: Does Africa Matter to The UK?

James Duddridge

Some twenty TWO years ago I was in the City working for Barclays Bank. After a couple of years, my feet began to itch. My boss asked me if, rather than quitting, I’d like to run a bank in a sugar field in Swaziland instead. Now, it was obvious that he wasn’t talking about Switzerland… but only because we’d just been talking about Zambia. But it would be fair to say my understanding of Africa was not very deep at that time.

So I found myself in Africa, for the first time. It was the beginning of my deep passion for that continent. Swaziland, my first African home, will always be particularly special to me – I met my wife in that country, and we later returned there on honeymoon. When I moved to Swaziland, most of my fellow EX pats were aid workers. But I really believe that I, as a banker, and the people who ran businesses, were doing at least as much good as my non-profit friends to help that country.

Traditional aid programmes building health, education and sanitation services in developing countries are vital. They make a real difference to millions of people. The UK Government will continue to provide this type of support – while recognising that aid alone will not eliminate poverty in Africa.

This government knows that it is the private sector that will grow Africa out of poverty, and over the last five years has put business growth at the heart of its African agenda.

The Africa I came to know in Swaziland, and later living in Cote D’Ivoire and Botswana, is a dynamic place of entrepreneurs, opportunities, an aspirant middle class and a vibrant youth culture. There are over 100 million active users of Facebook – a far cry from the impression of Africa shaped by Band Aid and other well meaning efforts. And this is the Africa this Government has sought to engage.

The private sector in particular. Because profitable businesses pay taxes. And tax revenue allows governments to INVEST in health, in education and in infrastructure. Tax revenues provide accountability between the government and the electorate. As we know here in the UK, the positive effects of a thriving economy are felt throughout society.

Yes, there are risks across the continent. Yes there are difficulties. Yes there are security challenges across the continent. We’re never short of people who will talk about the negatives. I will leave that to the naysayers and focus on the positives. But there are also commercial opportunities, abundant resources, and huge economic potential in the Africa I know and love.

Today, I’d like to talk about why Africa has been, and will remain, central to Britain’s foreign policy objectives. I’d like to highlight the achievements of the Coalition Government over the last 5 years, building on the achievements of the previous government. And I’d like to share a few reflections on the direction UK policy might take in the future.

Anyone can see that an active and activist UK foreign policy must have Africa at its heart. This means genuine partnerships with African countries. Our shared history, family and cultural connections mean that we are committed to partnerships with African countries, through the good times and the bad. Africa is important to us because Africa is part of the fabric of the UK.

But the continent’s diversity means it’s difficult to tell one “Africa story.” Africa is a continent of 2000 languages with almost 150 million Arabic speakers. There are 3000 tribes and peoples. A population of over a billion. And it is a continent of mammoth proportions: the distance between Cairo and Cape Town is greater than that between LONDON and Lahore.

Would we ever assume that all the countries between these TWO cities face the same challenges? Would we ever try to construct a single narrative for Britain, Italy, Syria and Pakistan? But it would be lazy not to join up the dots. Regional groupings, sectoral synergies, shared histories, languages and opportunities bring together the 54 countries. It is lazy to talk of one Africa, but equally it is lazy not to see the similarities.

This Government has been working together with our partners to address the challenges and seize the opportunities of each of our African partners. A key policy of this Government has been to re-position the UK’s relationship through:

• Bilateral expansion, increasing our footprint in Africa, where we have opened or re-opened 6 new embassies over the last 5 years in Cote D’Ivoire (I was particularly pleased that the embassy reopened in Cote d’Ivoire as I worked as a banker HERE), Madagascar, Bamako, Juba, Mogadishu, and Monrovia
• Increasing our development spend on economic development, GETTING alongside private sector interest in Africa to drive sustainable and inclusive growth that will reduce poverty by creating jobs, and reduce dependency on aid.
• Championing financial inclusion – DFID has been doing great work to support the use of technology like mobile money and M-Pesa, and branchless banking to make it possible for people to overcome the barriers to access, as well as working with African governments to make the operating environment for business simpler, fairer and, crucially, more transparent.

We have continued our long standing commitment to supporting Africa’s growth and prosperity. This Government will be remembered I think in the African environment for being the first major economy to meet the UN’s 0.7% target on aid spending. I am proud that Parliament has now passed this Bill.

Tackling poverty overseas is about addressing the root causes of global challenges such as disease, migration, terrorism and climate change. Addressing these issues is firmly in Britain’s own national interest as well as Africa’s interest. Addressing these challenges helps create the trading partners and markets of the future. So there is an element of self-interest.

We understand that while some countries in Africa still need aid, many more need INVESTMENT, expertise, and financial services – the World Bank estimates that the continent as a whole needs an extra $90bn CAPITAL INVESTMENT a year for infrastructure alone. So we want to champion Africa as an investment and trade destination of choice. To this end, we have:

• Established trade envoys, people such as David Heath and Baroness Scotland have had a fantastic effect, visiting more regularly than Ministers are able to;
• Added 20 Foreign and Commonwealth Office prosperity officers to complement the work of our fourteen UK Trade and Investment offices on the continent;
• Focused on our High Level Prosperity Partnerships with Angola, Cote d’Ivoire, Ghana, Mozambique and Tanzania, very different countries of different heritages, and this week I will be sitting down with them to hear what we can learn from their successes, and where we have built ambitious frameworks to encourage growth across a range of key economic sectors including education, agriculture, infrastructure, and extractives.

This Coalition Government has understood that it is in our enlightened national interest to promote prosperity and security on the Africa continent. We need our partners to be stable, prosperous and secure.

These things go hand in hand. Without peace, we cannot have prosperity; without prosperity, security is impossible to maintain. The prosperity agenda advances long term security. But we also need shorter term tactical security structures. We support NIGERIA and her neighbours in fighting the terrorist group Boko Haram by providing military, development and intelligence support, including counter-terrorism cooperation and training.

We work with multilateral partners in Somalia, where the UN-authorised, EU-funded, AU-led AMISOM mission has been a major success, degrading the capability of Al Shabaab and allowing the Federal Government of Somalia to re-take swathes of territory.

We’ve done great work over the last five years, but there’s plenty more to do. Plenty more opportunity. Challenges certainly remain. But even taking the limiting factors into account, the scope for opportunity on the continent is huge.

In January 2014, the International Monetary Fund predicted the sub-Saharan economy to grow by over 6.1 per cent in 2014. Compared to the Eurozone’s 1 percent predicted growth, this demonstrates the opportunity.

We need to position the UK to work together with our partners to make sure this opportunity is not wasted. And there is plenty that the UK can offer. Take finance. At the moment, only about 1% of private equity goes to Africa. But this appears set to change. In January, London based Helios Investment announced the first billion dollar Africa private equity fund. THE CARLYLE. Group and Blackstone Private Equity have both struck huge regional deals. This is a growing market. Investing in Africa is great for development, but also good for investors.

Over the last six months I have built on the work of Henry Bellingham and Mark Simmonds; I am talking about the same things, including the prosperity agenda.

Though difficulties and challenges remain – not least relating to OIL PRICES- the Economist noted in January, perhaps somewhat optimistically, that “money managers on Wall Street and in the City of London are taking crash courses in Swahili and learning to find Ougadougou on a map.” I think that’s somewhat of an exaggeration but it shows something of the shift.

Any incoming government will want to think about our Africa strategy, to do even more to join up Whitehall departments on Africa – not just the FCO, DFID and BIS but across the board, including the Whitehall Africa Group, and to make sure we’re GETTING the most out of the myriad opportunities on offer.

So while I’ve been back in the UK for over a decade now, my ties with the continent are, like the UK’s, enduring and deep. Over the NEXT ten years the challenge will be to move away from short term security concerns to longer term prosperity and stability. Whatever happens, the UK Government will be at the heart of that transformational challenge.

Australian government welfare report prepares brutal assault against disabled, unemployed

Patrick Kelly

Prime Minister Tony Abbott’s Liberal-National government last month released a report into the Australian welfare system that outlined measures aimed at slashing billions of dollars in public spending by denying welfare payments to hundreds of thousands of disabled, unemployed and other vulnerable people.

The report’s chief author, Patrick McClure, has been chief executive officer for both large charity organisations Mission Australia and St Vincent de Paul. He authored an earlier report in 2000 into the welfare system that paved the way for the further privatisation of social services and extension of punitive “mutual obligation” responsibilities for unemployed workers and others receiving welfare payments.

McClure’s latest document, titled “New System for Better Employment and Social Outcomes,” is a carefully concocted fraud. Like the government’s “Intergenerational Report,” it is aimed at bolstering efforts to justify a permanent austerity regime on the basis that current public spending is “unsustainable.” McClure declared that a “fiscally sustainable” system was being challenged by an “ageing population,” combined with a [deteriorating] fiscal environment, uncertain world economic outlook and longer term challenges.”

Social Services Minister Scott Morrison amplified these bogus claims in a speech to the National Press Club. Morrison insisted that “unless there is major structural change that is made to our welfare system over the next decade and beyond, over a generation, our social services expenditure will swallow the budget.”

In reality, there are ample resources to ensure that every citizen has a living income and access to high quality social services. Vast wealth is controlled by the ultra-wealthy at the top of society. Australia’s richest 200 people are worth almost $200 billion between them, while two and half million Australian residents are already impoverished, because of sub-poverty line welfare benefits and low wages. The purpose of “welfare reform” is to transfer even more wealth to the wealthiest 1 percent through a social counter-revolution eliminating every social concession granted to the working class in the post-World War II period.

The assault on welfare aims to give many recipients no choice but to accept low-wage employment in insecure and super-exploitative conditions. It dovetails with the drive by the corporate elite to reduce the minimum wage, abolish penalty wage rates and cut pay levels across the board.

Morrison gave short shrift to the McClure report recommendation that no current welfare recipient be made worse off under the “reforms.” He contemptuously declared: “If we’re going to take an ‘are you better off or worse off in the next five minutes’ approach to every single policy announcement, I’m not sure what people think that does to improve the quality of debates and policy reforms that are important over a generation.”

Under the guise of simplifying the welfare system, the report advised that existing entitlements be amalgamated into five payments: age pension, carer payment, child and youth payment, supported living pension (replacing the disability support pension), and a tiered working age payment covering everything else, including Newstart (unemployment), Austudy, and parenting payments.

The McClure report was premised on another lie that there are enough jobs for those who want to work. Under the subheading, “Where are the Jobs,” it referred to the Abbott government’s “commitment” to create one million new jobs within five years. The worsening crisis of the global capitalist system is in fact producing an accelerating onslaught against jobs, especially affecting manufacturing-dependent working class areas where many welfare recipients are concentrated. Nearly 800,000 workers are currently jobless and hunting for work, even according to the vastly understated official statistics.

To boost “workforce participation,” the welfare report proposes a series of draconian measures, including:

* All welfare payments will be denied to adults under 22 years. This will leave thousands of young people at the mercy of family and charity assistance.

* Public housing residents will no longer have rents set as a proportion of income, as this supposedly creates a “disincentive to work.” This measure would hike living costs for those in public housing, now overwhelmingly comprised of the most vulnerable layers such as refugees, women escaping domestic violence and those with serious mental health problems and drug and alcohol addictions.

* Income “quarantining”--a measure restricting the expenditure of welfare payments to approved items, which was first trialled on Aboriginal welfare recipients--is to be more widely imposed.

* The new “supported living pension” is to be accessible only to those people who are assessed to have a disability that prevents them working for eight or more hours a week—and where this situation is expected to last for at least five years. “Permanent disability” is to be re-defined in relation to “how long an individual is limited in their capacity to work, not the permanence of the impairment itself.” In other words, people with serious mental and physical health problems will be denied the disability pension if it is alleged that they will be capable of working a few hours a week at some point in the next five years.

The entire report is in line with what Treasurer Joe Hockey described as the “end of the age of entitlement.” Far from being a social right, income payments will be provided only to those judged unable to be pushed into low-paid work. McClure declared that “engaging with employers” was a major “pillar” of his proposed measures, with government subsidies boosted for corporations that hire disabled and long-term unemployed people.

Mindful of the wide opposition in the working class to this agenda, Morrison appealed to the Labor Party for support. In his National Press Club address, the minister admitted that “my concern is that right now there seems to be no appetite [in the community] for the change that is necessary.”

Morrison called for an “upgrade [to] the political debate when it comes to areas of important change for the country” and pointed to the Liberal Party’s support for several of the previous Labor government’s policies that undermined the welfare system, including on aged care and the disability insurance scheme. In office from 2007 to 2013, Labor began the dismantling of welfare by cutting off sole parent benefits to all those with school-age children and raising the retirement pension age from 65 to 67.

Labor Party leader Bill Shorten two-facedly declared he did not want to see a “blame the victim debate” on welfare, while eagerly accepting the offer to work with the government: “[W]e always need to be making sure it’s sustainable,” he said. “We’ll work on welfare reform with the government if that’s what they want to do.”