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Growing public debt: Our fear should be graft, white elephants

by biasharadigest


This project is a ‘‘gigantic folly”. It has no purpose. This quote and paraphrase summarise the sentiments of those in Britain back in 1895 who heard of the plan to build a railway line from Mombasa to Kisumu on the shores of Lake Victoria. The liberal MP Henry Labouchère said lyrically, if mockingly, of the plan: ‘‘What it will cost no words can express. What is its object no brain can suppose, Where it is going to nobody knows, It is clearly naught but a lunatic line.”

The phrase ‘Lunatic Line’, later adapted to ‘Lunatic Express’, evokes a wild dash towards nowhere for no purpose other than to satisfy the urgings of a sick mind. And yet, people would soon learn that there was a ‘method to the madness’. It now became possible to transport agricultural produce and other goods between Mombasa and the hinterland of Kenya and Uganda. Towns began to mushroom along the railway. And as soon as it reached Kisumu, shipping services across the lake began. A project criticised by parliament, derided by the public, and mocked by talking heads of the time, had begun to increase trade, create small businesses, ease movement of people and goods, spur agricultural growth, etc.

More than a century later, the same kind of hostility faced the standard gauge railway (SGR). Many commentators questioned its purpose. Today they ask: Where are the returns on the investment? Echoing the talking heads of a century ago, they call the SGR a white elephant with zero value. But as the Lunatic Express showed, development is an all-encompassing concept that includes trade, ease of movement of people and goods, access to services, etc. You cannot depict it by use of a simple equation showing an investment of X amount of dollars over Y period of time equals a return of X amount of dollars. In due course, the SGR will spur efficiencies, trade, direct and indirect jobs, small businesses, travel, etc.

But saying the SGR is a worthwhile investment is not the same as saying that its extra-budgetary expenditure is okay. Many observers believe that the extra cost of billions of dollars went into the pockets of cartels in cahoots with government. And this brings me to the point of today’s argument which is: mega projects and attendant debt are per se not the problem. The problem is corruption; high-capital projects that do not spur growth or development in the sense described above.

No country can grow without investment in infrastructure. China undertook huge infrastructure projects while moving millions of people out of poverty. US President Joe Biden proposes to spend billions on infrastructure. To pay for these kinds of projects, countries must borrow.

The question is whether a country uses the money it borrows prudently, and for projects that spur growth in the medium to long term. So the feverish debates in Kenya about debt and the debt ceiling are totally misplaced. What should concern us is corruption and white elephants.


Tee Ngugi is a Nairobi-based political commentator

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