State economic policy and development in Kenya: A study of African entrepreneurship in Kisii Township and its environs, 1930-1978
State Economic Policy and Development in Kenya: A Study of African Entrepreneurship in Kisii Township and its Environs, 1930-1978
Kennedy Mokaya Moindi
Dissertation submitted to the Eberly College of Arts & Sciences at West Virginia University in partial fulfillment of the requirements for the degree of
Doctor of Philosophy in History
Robert Maxon, Ph.D., Chair Steven Zdatny, Ph.D. Joseph Hodge, Ph.D. Robert Blobaum, Ph.D. Brent McCusker, Ph.D.
Department of History
Morgantown, West Virginia 2008
Keywords: Kenya, Gusii, Economic Policy, Development, African Entrepreneurship. Copyright 2008, Kennedy Mokaya Moindi
UMI Number: 3376439
INFORMATION TO USERS
The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleed-through, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion.
UMI Microform 3376439 Copyr ight 2009 by ProQuest LLC All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. _______________________________________________________________
ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, MI 48106-1346
State Economic Policy and Development in Kenya: A Study of African Entrepreneurship in Kisii Township and its Environs, 1930-1978
Kennedy Mokaya Moindi
This study explores African initiatives in the small scale business sector within Kisii town and the larger region of Gusiiland in the period from 1930 to 1978. Despite the transition to a market economy with the onset of colonial rule at the end of 19 th Century, African participation in trading activities within Kisii town and other market centers had remained minimal up to 1930. The slow integration of Gusiiland into mainstream colonial economic production before the 1930s was mainly attributed to its relative geographical isolation from major centers of economic production in Kenya together with the violent nature that characterized initial Gusii contact with colonial rule. Thus although Gusiiland had a good climate conducive for the promotion of commodity production and profitable exchange systems, the Gusii economy continued to be preponderantly characterized by subsistence forms of production as the local people took time to acquaint themselves with the western market economy. However, the accelerated commercialization of commodity production from the early 1930s and the penetration of the money economy transformed many Gusii households into consumers of western merchandise. Thus previous exchange systems such as barter and livestock trade which had remained uncompetitive within the colonial system, (that favored Asian and European merchants), were now rapidly transformed as Africans actively participated in such areas as produce, livestock and general merchandise trade. The expansion of economic space particularly after 1930, which was well augmented with encouraging state policy in support of African trading activities, were key factors that contributed to the rapid expansion of African entrepreneurship in Kisii town and the rest of Gusiiland. These experiences were further accelerated after 1963 when the state adopted the policies of Africanization which deliberately employed a legal framework to advantage the local people in commerce over non-indigenous communities such as the Asians and Europeans. This study has therefore focused on Gusii experiences under this economic system put in place by the colonial regime and continued into the independence period. It is revealed that as from the late 1920s the Gusii society rapidly adjusted to the western market. By the mid 1930s a significant proportion of the local population had began to show increased interest in emerging opportunities in the commercial sector either as partnerships or sole proprietorships, opened businesses that ranged from the small dukas selling a wide range of commodities needed by the local people, produce trade, maize milling, livestock trade and others. However, even with these significant inroads into the commercial sector, African traders were still uncompetitive against Asian traders most of whom had larger networks that transcended both the local and regional market centers. With strict state measures, most African trading activities were restricted to smaller market centers in Gusiiland with few having an opportunity to operate in Kisii town, which was mainly the domain of Asian and European traders up to the independence period.
After 1963, with Africanization programs gaining momentum, many Gusii traders rapidly relocated to Kisii town and took over the townships’ commercial sector that was hitherto mainly in the hands of Asian traders. The new generation of traders who have emerged in Kisii town still exhibit strong attachments to their rural areas from where they continue to generate capital (mainly from farming) that supplements what they earn from their businesses. Kisii town has emerged as an important commercial hub in the south western region of Kenya as it coordinates commercial activities with several smaller towns in the region. Many traders operating in the town also have business interests in other smaller townships such as Nyamira and Keroka. This study has therefore revealed that accumulation in Gusiiland has mainly been the result of the commercialization of the agricultural sector as well as the expansion of trading activities in the area. Kisii town therefore presents a unique situation where economic opportunities can be localized by creating regional centers of production. This will in the long run address the problem of the over concentration of commercial and industrial activities in such major urban centers such as Nairobi, Mombasa, Kisumu and Nakuru. Such strategies would alleviate problems of regional economic disparities by providing communities with opportunities for self advancement within their localities and Kisii town fits quite well into this scenario.
I am greatly indebted to various institutions and individuals without whose support this study would not have been possible. First, I would like to thank West Virginia University for awarding me a scholarship and teaching assistantship in the History Department that has enabled me to successfully complete my studies. Funding and awards from the department and the Dean’s Office at the Eberly College of Arts and Sciences enabled me to travel twice to Kenya (Summer of 2005 and 2006) to carry out field work in Kisii town and obtain crucial archival documents from the National Archives in Nairobi. I was also able to travel to the Syracuse University library to consult archival sources. I also acknowledge the support I have received from the Catholic University of Eastern Africa, Nairobi for granting me a study leave and other forms of financial support that have also contributed immensely to the successful completion of my studies. I am also particularly indebted to Prof. Robert Maxon, who is the Chair of my committee and has also been my mentor and advisor since the early 1990s when I was carrying out my M.Phil studies at Moi University, Eldoret, Kenya. Professor Maxon has taken great interest in the study of Gusiiland and Kenyan history in general and his support and advice was crucial for my choice of Gusiiland for this study. His encouragement and direction in the face of the challenges that one often undergoes in undertaking such a rigorous work, has given me the determination and focus to complete this work. Prof Maxon has profoundly impressed on me that serious historical discourse requires a meticulous and minute analysis of the sources which requires patience and a keen eye for unique details. All these have been crucial lessons that have profoundly shaped my growth as a scholar in African history. I am also thankful to the other members of my committee, Dr. Steve Zdatny, Dr. Brent McCusker, Dr. Robert Blobaum, Dr. Joseph Hodge and other faculty members in the department for offering valuable advice and support in the various stages of writing the dissertation. Dr. Zdatny has particularly taken keen interest in my academic progress at the university and has often gone out of his way to make sure that life is bearable even when things seemed to have hit a deadlock. As his student and graduate instructor in his classes, Dr. Zdatny has often offered valuable advice that has sharpened my “survival skills” both as a graduate student and instructor. Dr. McCusker, from the Department of Geography and Geology, has greatly impressed on me
v the benefits of a multi-disciplinary approach and a critical theoretical analysis of academic discourse and this helped to widen the scope of my analysis and focus. Dr. Blobaum, who was also the former head of the department, gave me all the support I needed to travel in search of data that has been important in reconstructing this work. During the period of collecting data here in the USA and Kenya, I received immense support from various individuals that made my work more manageable and realizable. I am particularly indebted to John Nyaanga, his family, and his colleague the late Dismus Aming’a, for hosting me in Kisii town and their willingness to spare their time to visit and interview the informants. Having a profound understanding and interest in the business sector in Kisii town where he has lived for quite some time, John Nyaanga was instrumental in identifying key businessmen in Kisii town and helping set up appointments and interviews. Nyaanga took keen interest in this research work and were it not for his assistance in initiating dialogue with the informants most of whom he has known personally for a long time, it would have been difficult to make any headway. The staff at the National Archives in Nairobi (at the Search Room) and the Bird Library at Syracuse (particularly Lisa Stubing), were also very helpful in accessing and making copies of relevant materials. Colleagues at the department and friends in Morgantown, all provided a positive and warm environment that helped me forge a head with this work. I particularly single out Martin Shanguhyia whom we have shared a lot in our quest for intellectual fulfillment. We have worked together for long hours at Woodburn Hall sharing ideas on our class work and the research. My other colleagues and friends including Chuck Steinmetz and his family, for warmly hosting me at their home in Pittsburgh while on transit to Kenya; Evelyn Ndege, Dr. Columba Nwoko and his family; Godriver Odhiambo, Kiva Mola, Sam Obae, Evans Basweti and Harrison Oonge have all provided a family like atmosphere in Morgantown that has enabled me to remain resilient and focused whenever academic and social pressures came my way. I also acknowledge the kind words of encouragement and advise I have received from Prof. Peter Ndege of Moi University, Eldoret who has taken keen interest in my progress in the academic world. Dr. Priscilla Shilaro has also been kind enough to offer a lot of insights that have helped shape up this study. Above all, I acknowledge the warm support and sacrifices made by my family members and friends in Kenya as I have gone about in my search for knowledge. My parents Andrew Moindi Nyarangi and Sophia Kemunto have instilled in me the discipline and focus that have
vi enabled me navigate the turbulent waters of social and academic endeavors. I have held long discussions with my father on Gusii history and he always encouraged me to bring out the best in myself. His own struggles as he strove to make our lives bearable have often been an inspiration for me to achieve something in life. My mother has been compassionate and encouraging in the face of many adversities and has been a great source of inspiration for me. My siblings, Charles Nyaanga; Margaret Keraka, Josephine Moraa; the late Peter Mecha; David Matara and Elijah Maranga and their families, have all provided me with fundamental support that has enabled me to realize my dreams of academic scholarship. The insights and discussions we have held on several occasions with Henry Nyabuto and Wilfred Keraka have often been encouraging and enriching and have contributed to shaping up this work. My children, Erica Mokaya and Ernest Mokaya, have provided me with a source of inspiration and sense of achievement as I seek to make their lives even better. Last but not least, I acknowledge the kind words of comfort and inspiration that I have enjoyed from Dorothy Mutio, my friend and companion who has stood by me as I face the challenges of academic and social endeavors. This study is dedicated in memory of my late brother Peter Mecha who was my source of inspiration. Peter took great interest in my development as a holistic individual and would have been overjoyed to celebrate the outcomes of my academic endeavors. His traits of hard work, wittiness and professionalism are hallmarks that will forever be cherished by family members and other individuals who associated with him.
This study examines the development of African entrepreneurship in Kisii town and the larger region of Gusiiland of south western Kenya from 1930-1978. The major thrust of the arguments presented in this study is on the process of the social and economic transformation of the Gusii people during the period of British colonial rule and after. The transition of Gusii society to colonial rule at the end of the 19 th century marked a major shift in the composition of the indigenous institutions and structures of production as they came into contact with western capitalism. The penetration of western capitalism which was undertaken through such processes as the introduction of commodity production, wage labor, trade, education and modern means of transport and communication, all had far reaching consequences on Gusii society. Compared to the rest of western Kenya, and due to its geographical location and the protracted resistance to the imposition of British colonial rule down to 1914 and the period immediately after, Gusiiland took a relatively longer period to fully get integrated into the colonial system. 1 Hence, whereas other parts of western Kenya, such as Mumias which were directly on the former caravan route to Uganda, came under British colonial rule much earlier, the introduction of commodity production, wage labor and western education took a late start in Gusiiland due to the prevailing situation. Therefore, although the colonial administration made concerted efforts to encourage the cash economy in Gusiiland, the situation remained largely unimpressive up to the early 1930s as African participation in the production process remained very minimal. 2 On the other hand, European settler production in the country as a whole was given precedence during these initial years of colonial rule. However, starting from the early 1930s, the commercialization of agricultural production through the introduction of high value cash crops, such as coffee and wattle trees as well as the acceleration of wage labor in Gusiiland, provided an impetus for the rapid transformation of the
1 As William R. Ochieng’, A Pre-colonial History of the Gusii of Western Kenya from 1500-1914 (Kampala, Nairobi, Dar es Salaam: East African Literature Bureau, 1974), 220-242, has observed, although Gusiiland and the rest of South Nyanza became part of the East Africa Protectorate (Kenya) in 1902 after the transfer of the Eastern Province of Uganda into Kenya, the people of Gusiiland and the rest of South Nyanza remained largely unaware of these developments as they were far from the major routes of communication and administrative stations (such as Mumias) set up in the region. When eventually the Gusii came into contact with the British at the end of 1904 what followed thereafter was a protracted period of resistance which made it difficult for the firm establishment of colonial administration and other institutions such as the missions and schools. 2 See also Robert Maxon, Conflict and Accommodation in Western Kenya: The Gusii and the British, 1907- 1963(London and Toronto: Associated University Press, 1989) and Robert Maxon, Going Their Separate Ways: Agrarian Transformation in Kenya, 1930-1950 (London and Toronto: Associated University Press, 2003).
viii local community. The outcome of these developments, though taking a gradual process, was the increased capital accumulation and differentiation within the local population, the result of added revenues from commodity production, wage labor and trade. Throughout the period leading to independence in 1963 and after, increased African accumulation through participation in agricultural production and commerce remained one of the hallmarks of the experiences that characterize this era of Gusii history. It is apparent, as observed in this study, that African entrepreneurship, though strongly embedded in the traditional social institutions of the Gusii society, was given a new dimension by the transition to western market forces during the colonial period. The production of surpluses from the agriculture sector and the increased need for western merchandise within the local population were all key factors that encouraged the local population to participate actively in the emerging exchange systems. Although the colonial state, as a major participant in this process, had initially given precedence to Asians and Europeans in the control of commercial activities in Gusiiland, African participation also became possible as new opportunities opened up. Eventually, the new class of indigenous capitalists, though taking a while to be recognized within the landscape of the colonial and post colonial states, have come to occupy a conspicuous presence in modern Gusii society through their active participation in the social and economic production processes. Therefore, the major focus of this study is to examine the patterns of accumulation and differentiation within the Gusii society as it emerged from pre-capitalist modes of production into the modern capitalist economy. In pre-colonial Gusii society access to means of production and the relations of production was strongly embedded in existing social networks, mainly the lineage and patterns of settlement. As a society whose economy was mainly based on subsistence agrarian production and related exchange systems, access to critical resources such as land for farming and grazing was mainly determined by these kinship ties. Within this system the allocation of resources was invariably determined by existing levels of power and authority (such as household and clan heads) which were universally acceptable within the lineage systems. However, the onset of colonial order significantly altered preexisting relations of power and production in Gusii society. Colonial order not only introduced a new economic structure based on commercialized agriculture, wage labor and trade, but also, more significantly, the emerging power structures revolving around the colonial state increasingly subordinated formerly independent Gusii political systems to a new structure of centralized authority which
ix now determined access to new economic opportunities. Hence, under the new economic order, traditional power structures now took a more passive and dependent outlook, whereas the colonial state (and the subsequent post-colonial state), took the salient role of determining access to the emerging economic opportunities. Therefore, this study has sought to examine how under the colonial and the post-independence order, the state emerged as a key component in reshaping local agrarian systems in Gusiiland into the market economy. Apart from establishing institutions and structures of control, the state also mediated on process of accumulation by closely identifying with a local collaborative class (such as chiefs and other state functionaries) that also played a critical role in ensuring the firm control of the local community. The study of African entrepreneurship in Gusiiland therefore reveals a strong correlation between the transitions into capitalist production with the onset of colonial rule and its impact on patterns of accumulation and differentiation within the local population. Strongly grounded in the historical analysis of these transitions, this study traces the process of the establishment and development of various forms of African entrepreneurship in Gusiiland with an emphasis on the nature and organization of the various enterprises; sources of capital and the challenges these businesses faced in their expansion. It is observed in this study that the initial stages of local entrepreneurship lacked high levels of specialization and training as most of the traders took up business as a supplemental activity to other vocations such as farming and livestock keeping. With this kind of straddling between trade, farming and other activities, it is evident that Africans, unlike the Asian and European traders who had more capital and spent more time on their businesses, were mainly involved in petty and itinerant trade which was largely unprofitable and in most cases never survived for long. This process of “trial and error” remained a key feature of African trading activities at least until the period after WWII when a combination of changed state policy and the accelerated transitions in the social and economic structure of the local community (such as the improvement of the purchasing power of the local community due to increased incomes and new tastes for western goods), created new opportunities for further entrenchment of entrepreneurial activities among the local population. By the independence period, with the positive encouragement from the state, many more people were ready to commit their incomes, savings and time into trading activities and this would further help to shape the emergence of a conspicuous class of entrepreneurs.
x Moreover, a major approach taken in this study is the focus on a specific and unique segment of the population which enables a more detailed and elaborate analysis of African entrepreneurship. Thus unlike previous studies on economic change in Kenya which are mainly characterized by generalizations, this study, though covering the whole of Gusiiland in general, gives specific focus to African trade in Kisii town. By taking the case studies of some of the most successful local businesses in the town, the study is able to provide valuable insights on the nature and development of African entrepreneurship. Kisii town, which was established in 1907 as the headquarters of the then South Kavirondo District (SKD), later South Nyanza (SN), provides an ideal environment for the study of African entrepreneurship, as the region where it is situated was the site of intensive commercialization of commodity production, which acted as a major stimulus to local trade. After independence Kisii town was also among the several medium sized towns in the country which experienced rapid Africanization of their commercial activities following state legislation that prevented Asians and other non-indigenous communities from trading in these townships. Although the major focus of this study was not to analyze cultural and sociological conditions pertinent to the growth of African entrepreneurship in Kisii town, the oral interviews nevertheless revealed important cultural norms that have shaped the advance of African commerce. This is an area where further research can provide important insights. Moreover, the findings of this study have shown that state policy, when well articulated with local interests, can play a crucial role in the improvement of the livelihoods of communities residing in rural and peri-urban areas such as Gusiiland. In the recent past, revelations in studies by such organizations as the ILO and the World Bank of the growing mass poverty in rural areas due to unemployment and over-cultivation of available farming lands, have led to new initiatives to address this situation through the encouragement of alternative means of livelihood. The encouragement of private enterprises through the support of small scale businesses is one such approach that has gained currency as various stakeholders address this issue. Several studies on the development of indigenous entrepreneurship have been done particularly in West Africa but few have been undertaken on Kenya and East Africa on the other hand. This study, by focusing on Gusiiland, a region that has experienced high population explosion resulting in an extreme land crunch, is timely as it suggests alternative avenues to income generation in the area. The study also reveals that although Kisii town is currently facing
xi acute land shortage for further expansion, with articulate and proper planning, the commercial and industrial sectors in the town can be developed and this will ultimately help address such problems as the massive exodus of the local population to major urban centers and other areas outside the region. Other themes that have emerged as pertinent in this study also relate to issues of race particularly in regard to relations between local Gusii and Asian traders and also gender issues particularly on the general marginalization of women in Gusiiland from mainstream entrepreneurship. It was apparent, as revealed in the interviews, that few women have today emerged as leading traders in Kisii town. This could be due to various cultural and economic setbacks. These and other issues require further research in order to reach proper conclusions. Finally, the study has also shown that the Gusii, just like other communities in Kenya, given a conducive environment are able to embrace traits of capitalism through various forms of accumulation. This therefore clearly dispels the often popular stereotype by Eurocentric scholarship that capital accumulation and differentiation is a trait characteristic only of western societies. The insights emanating from this study were made possible through the meticulous analysis of various sources ranging from oral interviews, archival and secondary literature. This study has particularly benefited from oral interviews conducted in Kisii town during the summer of 2005 and 2006. Approximately twenty five respondents (including traders and other individuals) were interviewed in Kisii town and a few other towns such as Keroka and Nyamira. The choice of the respondents was randomly done but specific focus was mainly entrepreneurs who had started business in the period before independence to the late 1970s and 1980s. Traders who recently began their businesses were not interviewed. The focus on the earlier generation of entrepreneurs was important as these provided crucial insights on the history of local entrepreneurship in the area. The information obtained from the interviews has been brought together under the case studies in Chapter eight although reference is made throughout other Chapters in the study. This study has also greatly benefited from archival materials that were mainly sourced from the Kenya National Archives, Nairobi, Ohio University, Athens; Bird Library at Syracuse University and the Wise Library of West Virginia University. Valuable documents consulted included Annual and Monthly Intelligence Reports from the Department of Agriculture, Native and African Affairs Departments and others. These were helpful in the reconstruction of general
xii economic trends in Gusiiland and the rest of the country during the period covered in the study. Reports from the Ministry of Commerce and Industry, available at the National Archives, Nairobi, proved particularly valuable in delineating state efforts towards the development of African entrepreneurship in the period from the late 1940s. In addition, important information was also obtained from newspapers, particularly the East African Standard, parliamentary reports and Colonial Office Reports that are available in microfilms at the Wise Library. Secondary sources available in various libraries and other documentation centers were also utilized to supplement the primary materials. The study has been organized into nine Chapters each of which examine in depth key transitions that characterized the development of African entrepreneurship in Gusiiland from 1930 to 1978. Important themes for Gusii economic transformation and African entrepreneurship that are recurrent throughout the study include state economic policy, the development of commodity production, wage labor, marketing, urbanization, African trade, accumulation and differentiation. All these are important themes that had strong underpinnings in African entrepreneurship in Gusiiland. Whereas Chapter One has chartered out the theoretical basis of this study and the methodology employed in the analysis of the data, the rest of the Chapters have examined in depth the development of African entrepreneurship in Kisii town and the rest of Gusiiland starting from the 1930s to the 1970s. Chapter 2 seeks to examine the initial transformations that characterized Gusii society as it encountered western capitalism down to the late 1920s. The Chapter demonstrates elements of continuity and restructuring of indigenous social and economic structures as they came into contact with the western market economy. Chapters 3 and 4 have examined the start of the accelerated integration of the local households in Gusiiland into commercialized production through the introduction of the cash crop economy. Further, the restructuring of the local social and economic landscape through such mechanisms as the streamlining of the marketing system together with the establishment of the LNCs all acted as a strong impetus for the advance of African entrepreneurship in such upcoming urban centers as Kisii town. This process, as elaborated in Chapter 4, took a firm ground after WW II. Chapters 5 and 6 examine the rapid expansion of African entrepreneurship in Gusiiland during the critical years of the transformation from colonial to independent rule. The war time economic boom which was accelerated by new state policy during the 1950s that was geared at the economic empowerment of local communities acted as strong motivation for the rapid
xiii expansion of African commerce in Kisii town and other market centers in Gusiiland. The continuities of local entrepreneurship and accumulation within the local population are examined in Chapter 7. It is observed in this Chapter that the policies of Africanization pursued by the independent state gave further encouragement to African entrepreneurship. By the end of this period African entrepreneurs in Kisii town and elsewhere had clearly distinguished themselves as a distinct segment of the local social and economic landscape through accumulation in various sectors of the local economy. Chapter 8 provides case studies of some of the outstanding businessmen in Kisii town, and in this analysis the individualized character of this emerging entrepreneurial class is revealed. Chapter 9 gives a summary of the major issues raised in the study and important lessons underlying the emergence of African entrepreneurship in the context of the current challenges of development facing households such as those in Gusiiland that are transitioning to modern capitalist forms of production. Lastly, a note is made on the currencies and other standard measurements used in this study. Until the independence period, one Sterling Pound (₤) exchanged at 20 East African Shillings until 1967 when the Kenyan shilling was adopted. In recent times, the Kenyan shilling has continued to depreciate against the pound as its value depreciates in the world markets. Also, standard imperial measurements such as the pound (lb) have been used alongside the metric measurements in kilograms (kg) in the tables. Again, the terms Indians and Asians have been used interchangeably in the text in reference to immigrants from the Indian sub-continent who arrived in Kenya and the rest of East Africa from the start of the colonial period. In the earlier Chapters the term Indian was more commonly used even by the colonial administration but for the independent period the term Asian is preferred.