Uhuru has 950 days to turn around the economy

When President Uhuru Kenyatta and his Deputy William Ruto swept to power in 2013, they told Kenyans that they would help the country bake a bigger cake so as to create one million jobs.

To create a million jobs, they cast their eyes on economic growth of between seven and 10 per cent in their first two years in office.

“Our fundamental aim is the attainment of high and sustainable levels of economic development within a stable and secure environment,” read part of the Jubilee party’s manifesto.

Faster economic growth would also reduce the rate of poverty and meet the requirements of Kenya's growing population.

With 950 days to the end of Uhuru’s second and final term, double-digit growth remains a pipe dream. In Jubilee’s eight years in office, there is not a year the country has managed more than seven per cent growth.

When Jubilee came to power in 2013, economic performance in the previous five years had been on an upward trajectory from a 2008 low when it grew by 1.5 per cent.

In 2010, 2011 and 2012, the economy grew annually at 5.8, 4.4 and 4.5 per cent, respectively. In 2013, it leapt to 6.9 per cent.

Manufacturing, which was a pillar of Jubilee’s ambition to create jobs, has shrunk to less than eight per cent despite the government giving incentives to expand it to 15 per cent of GDP.

The President, in his manifesto, committed to create at least 6.5 million jobs over five years so that Kenyans, particularly the youth, could secure and maintain good jobs and enjoy a decent life.

The President has since come up with the Big Four agenda. The Head of State hopes by the time he leaves office in 2022, the share of manufacturing as a fraction of total national output will have increased to 15 per cent from the current 9.2 per cent.

In his agenda, all citizens will also enjoy food security.

The Jubilee administration would also like to build half a million affordable homes and provide critical healthcare service to every Kenyan by 2022.

Instead, Kenyans are grappling with reduced circulation of money, punitive taxes and unsustainable fiscal debt, according to Scholastica Odhiambo, a lecturer from Maseno University.

Th national and county government have crippled the private sector by failing to pay pending bills, which are estimated to be more than Sh100 billion.

There is also over Sh30 billion owed to manufacturers as tax refunds.

Taxes, as a fraction of GDP, have dropped from a high of 24 per cent to less than 15 per cent. There has been a change in the country’s economic structure where agriculture, which pays few taxes, has expanded at the expense of tax-yielding sectors such as manufacturing.

Poor revenue collection has seen the government on a borrowing spree, with public debt surging to Sh5.8 trillion, or close to 60 per cent of GDP.

To Uhuru’s credit, nearly every Kenyan has access to electricity. The country is among few African countries on course to attain universal access to power by 2022.

Dr Odhiambo explains that the cost of living is high and businesses are facing a repressive period.

She thinks that for the remaining days, the President can promote policies which will provide reprieve for consumers and businesses to thrive.

"This can be done by enabling effective money circulation through payment of debts owed to business by government, and tax relief on household necessities,” said Odhiambo.

National Treasury mandarins led by acting Cabinet Secretary Ukur Yattani also think payment of pending bills will go a long way in rebooting the economy.

Asked about his goals for 2020, Yattani said his ministry will seek to enforce and sustain austerity measures for all public institutions. Already, the government has slashed non-essential spending by half with items such as tea, snacks, water, training and traveling being suspended by most State corporations.

“In 2020, we will make the pending bills menace/culture in national, county and State corporation an extremely uncomfortable situation for all defaulters. We will enforce both administrative and legal measures so that public institutions remain respected and contracts entered are worthwhile,” said Mr Yattani.

He added that the Government will aspire to see public and State officers inject transparency and prudence in public debt management. “We need to address the middle-level structure of government bureaucracy to have a change of mental framework in public management, inject efficiency and destroy the cancer of corruption.”