Analysis: To fix the economy, Ruto should first fix his government

National Treasury building. [Denish Ochieng, Standard]

We have done the 100 days, and New Year’s was President William Ruto’s 110th.  As a positive sign, he has embraced constructive criticism from the Azimio minority (not opposition), although some of the rest of his Kenya Kwanza team seem less willing to be called out.

The “handshake” between former President Uhuru Kenyatta and former Prime Minister Raila Odinga seems to be an endless bugbear; perpetually offered as the backdrop to Kenya’s current economic malaise.

Of course, it is a little more complicated than that. Kenya’s jobs crisis was identified in the early 1970s. Our import substitution economic strategy of the time showed no regard for productivity or competitiveness, which is probably the same reason why our flip-side export-led development strategy is largely a private sector practice of selling raw, unprocessed (crops) or natural (tourism) stuff. We simply haven’t risen to the complexity level that enables us to make things efficiently.

This is not to say that we don’t have contemporary problems to fix. A past decade of debt-fuelled investment of unclear social, economic or financial return has driven us back into the arms of Bretton Woods. And the current state of the fiscus is such that we are basically borrowing from Peter to pay Paul. What President Ruto has before him is a unique opportunity to fix this picture.

As I wrote at the beginning of last year, the Presidency is about three roles – security, governance and economy, while Governors are mandated on the last two. As said later around the time of Ruto’s inauguration, his actual performance would be determined by his theories on three things – society, government and the economy. We have heard plenty of campaign-style words thus far, but what seems to be missing is an honest picture of today, and an inspiring picture of tomorrow. 

First 100 days

We hear the ideation, but we cannot see the end-game. This is probably why Azimio la Umoja rated his first 100 days at four out of 10; and Infotrak polls put his performance at “average”.  I am a great fan of ideas, which is why my last piece offered 11 themes for this administration. Intergenerational insight and pro-poor perspicacity as the basics.

Food, health, green and digital as transitions to be mainstreamed. Human talentalisation, inclusive financialization and connective tradeability as Kenya-specific leapfrogs. Dignified liveability as an end-state, with its reverse being arrested development. This is the essentialist framing for Kenya 3.0.

Now that we are in 2023, the transformational work begins and the “rear-view mirror” language ends. To be clear, it should not be forgotten that a quarter of the adult population voted for Kenya Kwanza, another quarter voted for Azimio, the third quarter registered but did not vote, and the final quarter did not bother to register to vote. That is the societal state of the Kenyan nation today.

Policy action

But President Ruto doesn’t decide society, and he only indirectly runs the economy through policy action. His real transformational influence will be in how he runs government. Which requires that he has, in his mind, a clear theory of government beyond announcements and appointments.

This is not idle thinking. From personal observation and experience, the difference that late President Mwai Kibaki brought was in his uncanny theory of government that understood the difference between the frustrating bureaucratic system he inherited and frustrated bureaucrats. 

So he de-frustrated bureaucrats by incentivizing them to de-frustrate the bureaucracy.  Think ministerial strategic plans, performance contracts and rapid results initiatives. Government effectiveness slowly but surely translated into better economic performance. There is a quiet irony here in the late Kofi Annan’s observation – as UN Secretary General before he came to rescue Kenya from its 2007/8 conflagration - that good government is a prerequisite for good governance.

It is fair to surmise that President Ruto has before him a radical “good government” opportunity. The legacy side of this opportunity must centre on a zero-corruption approach that smokes out public servants who are almost biblically multiplying earnings in the thousands into millions. In Kibaki’s days, the target was bureaucrats in the old “officer to gentlemen” K to P job groups. Procurement and accounts offices are where much of it happens, but it’s technical officers too.  And the new wave goes all the way to the top in MDAs, literally “the fish rotting from the head”.

Let’s place these thoughts in current context. MDAs are now working on three sets of budgets, the supplementary budget estimates for the current 2022/23 fiscal year, sector resource demands for 2023/24 and audit explanations for 2021/22. The first will reflect most of the announced budget cuts for which the IMF has showered plenty of praise. Going by recent history, the second will likely exceed the Sh3.6 trillion resource ceiling by a trillion at least.  Unless Ruto is serious about actually changing this, we will have the “budget impunity” that eventually translates to “budgeted corruption”. The last effort simply adds to our litany of zero action on audit findings.

On 2023/24, we may refer to this as “shoot for the moon” resource bidding, with lots of “business as usual” and not much in the way of real policy execution, project implementation or service delivery outputs to outcomes. It is our fundamental budgeting flaw; good money follows bad cash.

Yet, there is a radical moment present to the President that is a veritable contradiction in terms.  Because the opposite, visionary angle to this opportunity might be “entrepreneurial government”.

Let’s walk briefly through this progressive idea first offered by David Osborne and Ted Gaebler in their wonderful 1992 tome titled “Reinventing Government: How the Entrepreneurial Spirit is Transforming Government”. Their thoughts – which inspired Vice President Al Gore’s National Performance Review (remember that brilliant Clinton-Gore combo?) - were targeted at a stuttering American bureaucracy that wasn’t quite delivering efficiently, responsively or democratically. 

Their view (like Kibaki’s above) was that the bureaucracy was the problem, not the bureaucrats.  Their answer was 10 interesting principles that offer a different take on the theory of government.

A catalytic government steers rather than rows. It enables private sector without trying to run it.  A community-owned government empowers people then it serves them. It doesn’t give us fish; it teaches us how to fish. A competitive government gets that public sector delivery is a value for money, citizen-facing effort in the same way that private sector is a high-value customer-relevant experience. A results-oriented government focuses on the end-game; outcomes, not inputs.

Prevention vs cure

A mission-driven government steps beyond rules and procedure; it humanizes bureaucratic norms. A customer-driven government prioritises, as noted above, the Kenyan over the government. It acts for Kenyans first. An enterprising government understands that earning trumps spending; so it works to balance the numbers while keeping itself in the black. An anticipatory government focuses on prevention over cure; an attitude that ranges from health through security to actual food.

A decentralised government respects devolution, by moving from the tradition of hierarchy to the modernity of participation and teamwork. Finally, a market-oriented government understands (to repeat) that its DNA builds a pro-markets private sector, then pro-business policy shall emerge.

Do these principles suggest the privatisation of government? Not at all. They are excellent guides towards what better, not bigger or smaller, government might need to look like. The phrasing is particularly useful. Private sector. Service delivery. Bigger thinking to internalise devolution in the wider scheme. But counter-intuitively, a fresh perspective on government as the base of entrepreneurship without actually being in business. For Kenya 3.0, this is Government 3.0.

Here’s the real Government 3.0 point. It cannot start with what Azimio pointedly described in their 100-day report as “clueless, hopeless and reckless”.  It does not go to the “business as usual” of announcements and appointments that bloat government amidst a macro-fiscal emergency. If anything, an approach around “jobs for the boys and girls” sounds miles away from transformative.

And there is no way the President will fix the economy if he cannot fix government. Kenya 3.0 needs Government 3.0.

There are some themes he might work on for the economy, but there are an equal number of principles that could make the difference. In his theory of government, the 2023 ask and task might be to build an entrepreneurial government that is not “tenderpreneurial”.

The Standard
Get unlimited access to The Standard website!