State should not drive the economy into painful structural adjustments

President Uhuru Kenyatta’s regime must see to it that policies that are being passed are those that will spur economic growth, and at the same time preserve the sovereignty of the State.

Debate on how the country is managing its debt level, trimming the wage bill and putting into good use borrowed and tax money is healthy and should get policymakers thinking.

Recently, the International Monetary Fund's (IMF) review team was in the country to meet policymakers in the wake of news that the Sh150 billion standby facility is due to expire. The body has for long urged the country to have its debt level in check. It also opposed Government putting control on interest rates.

While some of their suggestions mean well for the country, they are a worrying reminder that Kenya’s policymakers may not have done an excellent job in the recent past. Bodies such as IMF and World Bank are always willing to help, but this often results in governments tampering with existing policies, some at the expense of the citizen’s well-being.

For instance, the latest visit by IMF has seen Government commit to review the cap on interest rates. This could, sadly, see the cost of borrowing go up again. And in a bid to show such international bodies that they are getting serious in cutting appetite for debt, policymakers have proposed to lump value added tax on petroleum products in order to increase revenue. This could see the cost of living rise.

If the Government had got its policies right from the start, such pressures from international bodies would not arise. In 1980, Kenya took a loan from World Bank to curb emerging economic problems. In exchange, Kenya had to reduce budget deficit, promote exports, liberalise trade, reform interest rate regime and cut down its funding on social services.

This was followed by similar loans in 1982, 1986, 1988. And with each loan came polices that saw Government sacrifice its citizens; through reduced funding of social services and laying off workers.

As a sovereign state, Government should put its house in order to avoid recurrence of such loans. The path of taming wage bill, sealing corruption loopholes and going slow on debt should just come naturally from State.

Waiting for international bodies to come knocking only makes life unbearable for citizens, as policymakers resort to meeting conditions for loan and aid.