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Row over key Government jobs choke economy

FINANCIAL STANDARD
By | February 15th 2011

By Jackson Okoth

With President Kibaki more than half way through his final term as the country's Chief Executive, the fate and scorecards of some of his political appointees have been thrust into the limelight by the controversy over his recent nominees to public office.

And Treasury may soon become the epicentre of all storms to come, because the tenures of the Central Bank of Kenya Governor Prof Njuguna Ndung’u and Kenya Revenue Authority Director-General Michael Waweru are up.

These offices, alongside that of the Controller of Budget, have a stranglehold on the economy. Mr William Kirwa, if confirmed as the Controller of Budget, will hold a powerful position because of the devolution of power to the new counties.

Parliamentary proceedings. The Constitution, in specific sections and chapters, states that occupants of government offices shall be nominated by the President in consultation with the Prime Minister and, with the approval of the National Assembly. Photo: File/Standard

But in the background of Kibaki’s looming exit is a huge patronage network set up by his trusted aides, which is causing alarm for those eyeing State House in 2012.

Keen political observers believe Kibaki and his aides are setting the agenda for his successor with the latest appointments to key constitutional offices.

Starting Tuesday, Parliament will decide the fate of Kibaki’s nominees to the offices of Attorney General, Deputy Public Prosecutor, Controller of Budget and Chief Justice.

Because the new laws make the process of removing these appointees from office long and torturous, Kibaki is effectively stacking the deck of cards against his successor.

Kenyans expect every new President to accomplish much the same thing as the last: reform Government and make it work better, and thereby solve the nation’s myriad problems.

The idea of reform is what is normally referred to as the administration’s "management agenda," and truly represents the most important element of the presidential transition process.

Economic jitters

Already feeling the heat of the prevailing political storm in the Coalition Government is activity at the Nairobi Stock Exchange (NSE), and the Kenya Shilling among other key indicators.

But the political wrangling within the Grand Coalition Government and premature campaigns for the 2012 presidential election are starting to worry sections of the business community.

"Investors are concerned that the political cycle has arrived early and the ongoing elevated noise levels have turned everyone defensive," said Aly Satchu, an independent financial analyst.

A market activity chart at the NSE indicates a slide in last few days. The NSE 20 Share Index has declined from 4,526.78 points in January, to 4326.57 points on Thursday, last week. This scenario is likely to impact negatively on the highly anticipated six per cent GDP growth rate for the current financial year.

"Already, the Nairobi Stock Exchange (NSE) and the shilling have both turned defensive because of heightened domestic political noise surrounding these nominations saga," he adds.

The NSE is a key barometer of the economic performance.

There is a growing feeling in financial circles that the two principals have to entertain the idea of coalition etiquette.

"Even at the corporate level, few companies can succeed where both the Chairman and Chief Executive Officer are constantly at loggerheads. A country is no different," said Satchu.

"In the event that Parliament decides to take this matter to the floor and vote on the nominees, there is a danger that those eventually appointed will lack legitimacy, having been endorsed by one side of Government," explained Paul Muite, a prominent city lawyer and former Kabete legislator.

He also warns that the economy could suffer a confidence crisis if the Controller on Budget, a crucial cog in the country’s financial engine, does not gain wider legitimacy.

"Appointments to these State offices should be done of behalf of the people and not individual politicians," said Muite.

The ongoing dispute erupted when Prime Minister Raila Odinga disputed the list of nominees presented to Parliament by President Kibaki, saying he never consulted the PM as required by the National Accord.

The names forwarded were High Court Judge Alnashir Visram as Chief Justice, Professor Githu Muigai as Attorney General. Kioko Kilukumi as Director of Public Prosecutions and Kirwa as Controller of Budget.

brinkmanship

Transitional clauses in the Constitution require consultations between the office of the President and that of Prime Minister, but Kibaki’s side maintains the PM was fully briefed. Added to this equation are provisions that those appointed by the President must be vetted by Parliament.

While political temperatures surrounding President Kibaki’s appointees are rising by the day, there are those who dismiss the notion that this brinkmanship could derail implementation of the new Constitution.

"I do not think that there will be a delay in filling these offices, especially that of the Director of Budget," said Dr Moses Ikiara, Executive Director of the Kenya Institute for Public Policy Research and Analysis (KIPPRA), a public think tank.

"The implication to the economy of delays in appointment of these officers is grave and Parliament is aware of this. We do not want to be seen to be sending the wrong signals," said Dr. Ikiara.

He adds that no one is challenging the Constitution, including the National Accord, the way is clear on how key presidential appointments to State office should be carried out before the 2012 polls.

The nomination of Kirwa to the powerful post of Controller of Budget has already come under close scrutiny, with MPs from Rift Valley allied to Eldoreth North MP, William Ruto questioning his suitability.

It is still unclear whether Kirwa will withstand the rigours of parliamentary investigations, or survive possible traps set by House committees.

Among them are questions surrounding his stint at the Agricultural Development Corporation (ADC) pending before the parliamentary Committee on Agriculture.

If Parliament approves his nomination as the Controller of the Budget, then Kirwa will become one of the most powerful technocrats in the next administration, inheriting part of the clout and influence currently enjoyed by Treasury mandarins, some of whom currently wield power without checks and balances.

"Activity at the NSE has declined by close to 30 per cent due to a myriad of causes, including the prevailing political noise in the country concerning nominations to State offices," said John Kirimi, Managing Director Sterling Investment Bank.

But the NSE has also been affected by changes in the geo-political arena, including instability in Egypt and its negative effect on the foreign investors board.

"We have seen local political heat affect this market before. Investors are therefore hopeful that current controversies surrounding nominations to State offices will be resolved soon," said Kirimi.

"We are optimistic about the ongoing measures to implement the Constitution. The business community is excited about this transition and therefore just have to wait and see what happens next," said Jas Bedi, Chairman, Kenya Association of Manufacturers.

The Constitution, in specific sections and chapters, states that occupants to each of these offices shall be nominated by the President and, with the approval of the National Assembly, appointed by the President.

Transition Government

In the case of the Judiciary, both the Chief Justice and Deputy Public Prosecutor are to be nominated and appointed by the President, in accordance with the recommendation of the Judicial Service Commission, and subject to the approval of the National Assembly.

In the sixth schedule, the new Constitution states in its transitional and consequential provisions that a new Chief Justice shall be appointed by the President, subject to the National Accord and Reconciliation Act, and after consultation with the Prime Minister and approval by Parliament. Indications are that the two committees charged with investigating the nominations will approve all but that of the Chief Justice.

But House Speaker Kenneth Marende, a stickler for striking a balance, is likely to advise MPs that laws of natural justice dictate that they cannot accept three nominees and condemn the other. In short, it is either all or nothing.

It will be interesting to watch who has the numbers in the event that Parliament decides to put the matter to the vote.

Last Thursday, Marende declared: "A committee does not of itself finally determine a matter for the House. Additionally, it must be noted that questions of constitutionality and observance of the law are not matters to be determined only by the vote of either the committee or indeed of the House."

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