It is economic déjà vu for Zimbabwe as the central bank battles spiralling inflation. The Reserve Bank of Zimbabwe is attempting to introduce ever-higher denomination notes; but inflation still approaches 400%.
Kenya is not a dumping ground for US plastic
The new administration of US president-elect Joe Biden must resist pressure from US oil and chemical companies to use Kenya as a dumping ground for plastic waste.
In April, the American Chemistry Council (ACC), members of which include Shell, Exxon, Total, DuPont and Dow, proposed investments in recycling in Kenya, provided that the recipient country accepts US plastic waste. Kenya would get about 500 million tonnes of plastic waste exports from the US per year.
Until January 2018, most of the world’s plastic waste was sent to China. Beijing decided that the environmental risks were not worth it and refused to continue. That led to plastic exports to Africa quadrupling in 2019.
But lack of infrastructure and rapid urbanisation mean Africa faces challenges just in managing its own solid waste. Researchers led by Jenna Jambeck have estimated that Africa’s total mismanaged plastic waste may more than double from 4.4 million metric tons in 2010 to 10.5 million metric tons in 2025.
The US exported more than 1 billion pounds of plastic waste to 96 countries, including Kenya, in 2019. The ACC says that a bilateral trade agreement between the US and Kenya wouldn’t override Kenya’s domestic approach to managing plastic waste or undermine its international commitments.
But, as shown by the Unearthed publication, the ACC has in fact sought to reduce those responsbilites. The ACC group opposed changes to the Basel Convention which from 2021 will limit plastic waste entering low- and middle-income countries.
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Kenya needs to diversify its economy. It usually runs a substantial trade deficit, and its main exports are primary commodities with volatile prices, such as coffee, tea, flowers and spices. Kenyan president Uhuru Kenyatta, who visited the White House this year, began talks on a trade deal with the Trump administration in July. But becoming a dumping ground is not the way to escape commodity export dependence.
Terms of Trade
Rapid digitalisation has lifted the share of services in Kenya’s economy to 27.7% of GDP. That process could be accelerated by the African Continental Free Trade Area (AfCFTA), due to come into force at the start of next year.
But Professor Tabitha Kiriti-Nganga at the University of Nairobi argues in a paper in April that Kenya’s level of physical and human capital is “so small that it falls below the threshold needed to start modern production processes.”
- The Kenya government needs to invest in improving its human resources, says Kiriti-Nganga.
- Linkages between local industries remain “minimal and mostly superficial”, and value-added export development, which has driven many dynamic developing economies, is “conspicuously absent” in Kenya, she adds.
The ACC sees access to African markets through AfCTA as the ultimate prize. A trade deal with Kenya would be a “foothold” which would enable the US to shape trade policy across Africa, it says. “Kenya could serve in the future as a hub for supplying US-made chemicals and plastics to other markets in Africa through this trade agreement.”
That would undo the progress on reducing the environmental impact of waste plastic made by Kenyan and African governments. Kenya has restricted plastic bags and single-use plastic products, while Rwanda has been able to ban single-use plastics and promote the use of locally produced construction materials instead of plastic insulation, while still increasing GDP.
Kenya needs to use AfCFTA to scale up its own industries, not as a free pass for US waste disposal.