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Political Fallacies Shouldn’t Drive Economic Behaviour

[vc_row][vc_column width=”2/3″][vc_column_text]In my previous life, I was an executive director on the board of Barclays Bank of Kenya. Being the first female in that position in the bank’s ninety-year history was a testimony to the bank’s progressive shift at the time to a more gender inclusive and younger board. Right outside the 8th floor boardroom at Barclays Plaza, was a toilet facility: for gentlemen only. The ladies toilet was a hop, skip and a jump further down the corridor where the staff bathroom facilities were. Now, a fallacy can be created here: that Barclays Kenya never envisaged a day that women would ever be on their board, and therefore contrived to only have a gentleman’s commode available that was contiguous to the board room. The more likely story is that when the building was constructed, the toilet facility was tucked on as an afterthought, as that boardroom was being partitioned. Back then, it was primarily men on the board and therefore it made perfect sense that it would become a gentlemen’s facility. With the passage of time it was never deemed necessary to add a ladies toilet probably because the female directors on the board never raised it as a mission critical board agenda item. Why do I give this story? I narrate it as it demonstrates how urban legends are created: That women were never imagined to ever join the boardroom and the lack of a toilet is evidence of such myopic thinking. Which is absolutely untrue.

Last week I had an early morning meeting in Upperhill, Nairobi’s rapidly trending “must have” corporate address. I turned onto Hospital Road and the rising sunrays in the salmon colored sky glinted off the steel and glass edifices of several new buildings. Upperhill is a testimony to unplanned gentrification, with a road infrastructure that is struggling to catch up to the real estate capital that has been heavily invested there.

That real estate capital is a further testimony to the fallacy that is often being perpetuated that Kenya is walking an economic tightrope, with certain doom waiting at the bottom of the political circus. The buildings didn’t drop out of a Jupiter sky. They were deliberately constructed by owners of capital that see further past the building’s balance sheet depreciation. I was a little stumped. A building is a large and long-term investment. It is a loud and vociferous “we are here to stay” statement. And there are several of those statements in that square mile or so that forms Nairobi’s emerging financial district. So I asked one of the corporate titans located in Uppherhill as to why there was such growth and development in the area, when the print, television and social media paint such a gloomy picture of the country’s future. His response was reflective of corporate Kenya: Social media in Kenya is an effective pressure valve, it allows for steam to be released regularly to reduce the compressive forces of political dissatisfaction. As a business driver there would be greater fear if voices of dissent had no outlet, as that would mean that the country would be snowballing into a cataclysmic event whose trigger could not be determined, as happened with Tunisia’s Mohamed Bouazizi’s self immolation in December 2010 in protest of police corruption and ill treatment that sparked off the Arab spring. Owners of capital detest the inability to predict or calculate political risk. Kenya’s political risk is seemingly one that can be calculated and absorbed in the cost of doing business in the financial capital of the greater East African region.

Italy provides a classic example of political risk divorcing itself from economic growth. By the time Silvio Berlusconi was taking on the Prime Minister’s office in April 2005 for his third tumultuous shot at greatness, he was forming the 60th government that Italy had had in the 60 years since it had become a republic in 1946. Past Italian governments hardly lasted more than a year on average. Yet Italy remains the 9th largest economy in the world, as well as a card-carrying member of the European Union and the G7 economic powerhouse. How is this possible, when we in Africa have been conditioned to believe that central (and now county) governments are the singular premise on which great economies are grown?

According to a report from Focus Economics, Italy’s economic structure relies mainly on services and manufacturing. The services sector accounts for almost three quarters of total GDP employing around 65% of the country’s total workforce. Within the service sector, the most important contributors are the wholesale, retail sales and transportation sectors. Industry accounts for a quarter of Italy’s total production employing around 30% of the total workforce. Manufacturing is the most important sub-sector within the industry sector. The country’s manufacturing is specialized in high-quality goods and is mainly run by small- and medium-sized enterprises. Most of them are family-owned enterprises. Agriculture contributes the remaining share of total GDP and it employs around 4.0% of the total workforce.
The Focus Economics reports adds that after World War II, Italy experienced a shift in its economic structure. It transformed itself from an agricultural country to one of the most industrialized economies in the world. The force behind the post-war economic miracle was the development of small- and medium-sized companies in export-related industries. In the following decades, the economy has had both ups and downs. It is also noteworthy that Italy is the last Eurozone member on Transparency International’s corruption index at number 69 next to Greece, Romania and Bulgaria. The Italian Court of Auditors estimates corruption to amount to about 40% of public procurement value.
We can and we are already growing into a regional economic powerhouse, if we leave politics to the politicians and simply focus on growing our SME base ourselves. Our stable shilling in recent volatile times also demonstrates our economic resilience. The Italian model substantiates that economic growth, in spite of political turbulence and corruption, is not such a fallacy.

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Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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A different kind of hiring strategy

[vc_row][vc_column width=”2/3″][vc_column_text]There is nothing more daunting to a weekly columnist than a deadline hanging over one’s head and a dearth of excuses as all reasonable explanations have been utilized in the past. So I am just going to dive into an article I stumbled on The Huffington Post UK that demonstrates potential disruption in future hiring strategies. Penned by Lucy Sherriff, the article is titled “Ernst & Young Removes Degree Classification From Entry Criteria As There’s No Evidence University Equals Success”. It goes without saying that anyone reading that will sit up and pay attention as Ernst & Young (E&Y) is one of the Big Four global accounting firms and, according to the article, the fifth largest recruiter of graduates in the United Kingdom.

What has E&Y figured out that the rest of us haven’t? According to the article,
Maggie Stilwell, EY’s managing partner for talent, said the company would use online assessments to judge the potential of applicants. “Academic qualifications will still be taken into account and indeed remain an important consideration when assessing candidates as a whole, but will no longer act as a barrier to getting a foot in the door,” she said.
“Our own internal research of over 400 graduates found that screening students based on academic performance alone was too blunt an approach to recruitment.
“It found no evidence to conclude that previous success in higher education correlated with future success in subsequent professional qualifications undertaken.”

In addition to the quickly forgotten aviation college scandal, our back street forgers continue to churn out Nobel Prize winning copies of degrees that are bandied about loosely by job applicants. Delinquent university students brazenly get their dissertations and assignments written for a fee by academic hustlers arriving at a degree that is part figment of imagination, part luck and a whole lot of balderdash that will only be uncovered after the same delinquent student is mistakenly hired. Frankly speaking I have always wondered what it is that a university degree adds to a potential hire for a non-professional job. By professional I mean lawyer, doctor, engineer, architect, accountant and the like. In my former banking life, I worked with colleagues that were chemical engineers, doctors, civil engineers, computer scientists, art majors, political scientists amongst several other varieties of non-banking related degrees. You see, there is no such thing as a Bachelor of Banking degree. You just had to be numerate, literate and fortunate to land a degree in what was and still is perceived as a lucrative industry. It is only in the last 15 years when a degree became a minimum entry requirement into many of the banks. In Barclays particularly, I worked with many colleagues who had joined the bank straight after their A-levels. They were smart, experienced and highly professional individuals who had learnt everything about banking in exactly the same way that I, with my university degree, had learnt. By asking questions, by being given tasks, by making (horrendous and expensive) mistakes and by being sent for in-house training. Most importantly, they had one thing that I didn’t: institutional memory and good instincts that came from years of experience. No university can teach you that. It was also a great source of tension whenever a retrenchment rolled by, as they were the easiest to target once the “mimimum qualification is a degree” rule was applied.

The upshot of these ruminations is: not every job needs a degree. It just needs a numerate, literate and, in the fast paced and rapidly changing work environment that rules today, consummate user of technology. One who is not afraid to ask questions or posture about his university pedigree. One who has tons of good attitude and an aptitude to learn and one, I daresay, who scored a C+ and below in her secondary school exams. Why you ask? That student will spend her future proving that four years of studying cannot be crammed into eight weeks of exams the result of which are supposed to define the rest of her non-academic life. If you have any doubts pop into the public university nearest to you and sit in on one of the classes. Once you get tired of counting classes of more than 200 students that have one lecturer who is supposed to mark all their assignments and exam scripts, you will start to realize that perhaps that university degree isn’t the quality guarantee that you had in mind.

In other completely unrelated news, I watched with horror a news item a few weeks ago where traders in a market in Kitengela were having run-ins with locals. The bone of contention was the usual nonsensical tribal rhetoric of “you are not from here therefore you don’t deserve to be doing business here.” I’ve quipped my thoughts in rabid discussions about the “bubble” that is the Kitengela, Isinya and wider Kajiado County land frenzy. The number of family disputes that have already arisen from forged land titles by errant sons or land sales in exchange for motor vehicles that end up on stones as cars cannot fuel or service themselves are legendary. Kajiado County is (forgive me this newly found euphemism) a hotbed of bubbling land issues that are sure to surface during Kenya’s predictable election cycle. I sincerely hope that I am proved wrong, but Kajiado County will be in 2017 what the North Rift was in 2007 and Likoni in 1997. The number of “outsiders” who have legitimately bought land in the buying boom over the last eight years are bound to be the fly in the ointment of a rapidly declining local population who still need grazing pasture and who are painfully bearing the losses of squandered windfalls. I am reliably informed that other than land that is proximate to the main road, excitement has cooled for property in the hinterlands of Kitengela and Kisaju. Idle land, coupled with flat broke former landowners and some incendiary politicians: A recipe for a perfect political storm.

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