This week marks the first anniversary for the hustler government in office. Not surprisingly, there has been heated debate across both mainstream and social media on the performance of the administration.
About a month ago, the President is on record claiming that he has either matched or surpassed the Kibaki administration’s economic performance in the 11 months he had been in office.
The opinions out here on the administration's performance are as diverse as our political differences are. However, what is clear is that folks will not be taken for a ride again, the way the Jubilee administration did.
The mainstream media has done a great job in enabling and bringing a sense of coherence in dissecting the issues at play. This must worry KK’s strategists and policy makers. Simply put, lies will not fly anymore.
Today, we use available evidence and publicly acknowledged facts to draw comparatives on Kabaki’s and President Ruto's administration around the one year milestone. For objectivity, we’ll frame the issues under three themes on leadership, planning and execution, and impacts at household level.
For consistency, I did a comprehensive analysis of the KK manifesto in this column on 9th July 2022. Four things stood out from their proposed agenda that are critical to this discussion. One, it was obvious the document had been drafted by a single person, presumably an all knowing central planner in economic lingua. Two, the document applied actual official data well and easily connected the candidates to the hustler narrative. Three, it heavily defined target spending without supporting programmes; and finally there was a obvious lack of clarity on the specifics of moving the agenda from paper to reality.
In terms of lived reality for the citizens and the politics of the day, there were felt similarities between 2002 and 2022. The economy was thoroughly battered with folks living on the edge and the political elites of the day seemingly completely out of touch with reality. In both cases, the masses out maneuvered ‘the system’ to get their voice heard. The transitions were fairly smooth giving each winning candidate a chance to make their intends known under the psychological 100 days in office.
The question at hand is: Are there any persuasive evidence or indicators on President Ruto’s assertions about his economic performance?
Evidentially, it is not debatable that the nation and the people were under a true master in Kibaki’s hands one year in office. The same cannot be said of the current administration. Let us pick some incidental indicators to demonstrate this. As per the data available on the Central Bank website, the weighted average commercial banks’ lending rates were 18.34 per cent in December 2002. The overdraft market was at an average of 18.56 per cent. As at December 2003, the same rates were 13.47 and 13.74 per cents respectively.
The 91-day and 182-day Treasury Bill interest rates were 8.38 and 8.79 per cent respectively in December 2002 and closed at 1.46 and 2.09 per cents in December 2003. The lending rates for commercial banks averaged 12.43 per cent in August 2022 and closed at 13.5 per cent in July 2023. The 91-day T-bill rates were 8.92 per cent in September 2022 and closed at 14.5 per cent this week.
One may wonder if this is not a peripheral indicator to a big economy like ours. The apologetics will argue, and justifiably so, that there are externalities contributing to the current situation compared to 2002. However, this conveniently ignores the fact the developed economies of Europe and USA suffered a severe recession in early 2000s.
This takes us back to the question of leadership. The old adage is that great leaders are defined during hard times as great sailors are made out of turbulence in the sea. For Kibaki, despite trashing the pre-election pact on the Summit, he appointed able men and women into his Cabinet, giving them complete autonomy in managing their dockets. It is out of this that programmes like the Free Primary Education, the famous ‘Michuki rules’ on public transport and financial sector reforms (including the interest rates above) got implemented successfully in under 100 days in office.
Contrast this with the current scenario where the President himself has made not so glamorous public comments about his own Cabinet members. More fundamentally, while Kibaki took the back seat and let his men run the show, the current leadership is observably a one-man show affair. Notice the lone voice discernible from their manifesto. It is the same philosophy that has been transmuted into the running of the government.
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Clarity of plan
Moving into the second thematic area, owing to the hurried manner in which the Narc coalition was put together, they lacked an action plan as they went to the elections. However, their immediate priority immediately after election was to develop the Economic Recovery Strategy for Wealth and Employment Creation (ERS). This formed the Narc government’s agenda between 2003 -2007, and laid the foundational system for the Kenya’s Vision 2030.
The National Economic and Social Council (NESC) that Kibaki chaired met every quarter without fail. Anybody is free to do a comprehensive audit, but I do not remember any single speech Kibaki ever made without reference to his plans for the economy. There never was any ambiguity as to what the priorities of the government were. Fast forward 2023, outside what is in the minds of KK political and bureaucratic elites, can anybody show us the Bottom-up Economic Transformation Agenda (BETA)?
The draft Medium Term Plan (MTP IV) was essentially complete on election night in August 2022, to this date, this plan has never been officially adopted to align and consolidate BETA. This is partly the reason why the media, experts and academics have struggled to render an objective scorecard on KK's one year in office. The only thing one can hang-on is their manifesto with the flaws highlighted earlier.
In November 2002, days after my graduation and to the 2002 presidential elections, I walked to the ABSA Bank Branch (then Barclays) City Market branch seeking an account to deposit a cheque of Sh28,800, refund from the University. An officer of the bank pleasantly advised that they did not have any account that suits me as a freshly unemployed graduate; but if I walked outside and straight to the right, there was an entity by the name East Africa Equity Building Society (EAEBS) and he was sure they would have something suitable for me.
That was the error of minimum balance and minimum operating balances in banking. The interest reforms of the Kibaki administration unleashed a never foreseen liquidity in the banking sector that not only revolutionised banking in the country, but also many other sectors across the economy. Lets face it, how many Kenyans had a bank account in 2002? How many Kenyans could access a bank loan? Who knew Kitengela, Rongai, Ruiru, Mlolongo/Athi River among many other places in the city and other towns?
By 2004, when EABS transformed into Equity Bank with a rallying call for “Benki ya Mwananchi”, the entire banking sector was literally hawking loans and going back to open branches in market centre where they had closed shop years earlier. The Kibaki administration never increased taxes, it prioritised efficiency in tax collection, re-opening the economy and taming government waste.
The Ruto subsidy programmes are yet to reflect on consumer prices despite mercilessly raiding employees’ pay slips and proposing more in his second year in office. The Hustler Fund remains good politics but bad economics.
Unbeknown to the hustler strategists and elites, the painful taxes are quietly consolidating a dissenting force of about three million Kenyans in the formal sector. Their pain is direct and personal, and these folks have the ability to think, plan and mobilise - they cannot be presumed to be like wild animals!