Kenya’s economy is in trouble despite denials by the State and local IMF experts

NAIROBI: The economy is doing badly: every Kenyan knows that. The government has mismanaged the economy since May 2013: only Jubilee honchos deny this. Mismanagement is part of camouflaging corruption: any Parliamentarian who has read the Auditor General’s reports covering financial management in government will confirm this. A rescue plan is needed to turn round the economy: the government talks about this but offers no concrete plan. The government, lacking a road map towards turning around the economy, has resorted to putting good money after bad money: this it has done by taking money from our pockets through unfair taxation and hoping it will use this money to pay its debts.

Under our specific situation, that is voodoo economics. Let me explain all these phenomena as follows.

When UhuRuto took over the reigns of government, we were told to forget the past and “move on.” But the words of the former US Ambassador to Kenya, Johnnie Carson, could not be easily forgotten: “choices have consequences.” Those Kenyans who have eyes to see can now see the consequences; those who have ears to hear can now hear how painful his or her neighbour is crying at the pain of not being able to pay for some very basic needs in life. Economic times are tough, and they are likely to be tougher.

UhuRuto took the reigns of government, not because they had a development vision to pursue, but because they had a case at The Hague to pursue and overcome. So the campaigns were financed — by whoever — to ensure a win at all cost without worrying about the mission to institutionalise democracy.

So how could a concern for managing the economy be upper most in their minds? It was not; and it has remained relegated to the back room of Jubilee politics.

Since money and propaganda — read ethnic regimentation—“won” them elections last time, it must do so in 2017. But this means money must be stashed away somewhere—from whatever source. Seen as a granary from which this money must be sourced, the State — and its projects — becomes the victim. Read the following:

“Billions lost in rail land payments. The government has lost billions of shillings in the acquisition of land for the standard gauge railway (SGR) through irregular compensation and over-payment of individuals affected by the project.”

That was reported in one of the dailies. The details are frightening. It reveals a cartel of businessmen, professionals and government officials out to benefit themselves financially at the expense of the ordinary taxpayer who will have to repay the foreign debt incurred by our government in building the SGR. Wind the clock backwards and let us see what economist David Ndii wrote not long ago.

“Three hundred and twenty seven billion shillings (US$3.27bn) is not loose change—that is the money we are spending to build the SGR. If the SGR proceeds, it will be the biggest loan that we have borrowed to date. It will increase our external debt by close to one third, our debt to GDP ratio by nine percentage points and our interest payments on external debt by 50 per cent.” That was in February 2014. But need we have spent that much money to build the SGR? Perhaps not. The money borrowed was most likely padded with kickbacks.

Lo; it has now come to pass: the SGR is being built, and more unnecessary cost being incurred through such things as inflated compensation for land acquisition. Rather than face this reality, the government is in denial, mobilising even the IMF gurus in Nairobi to come to its defence by more doses of voodoo economics. “Kenya’s economy is not all doom and gloom, after all. The country’s growth prospects and debt/GDP ratio are within acceptable levels,” says Armando Morales, the IMF representative in Kenya. And these “acceptable levels” are calculated in terms of “prospects for growth” and “risk levels” by IMF/World Bank standards.

Were you to ask me whether what the IMF representative says makes sense, I will tell you that when things happen the way they do with the inflated cost of building the SGR, the continued borrowing accompanied by heavy taxation of the common man to raise the money for repaying the debt and the diminishing prospects of funding our expenses through the oil discovery, I will tell you that Morales is simply playing PR for the government.

He needs to do that. Such expatriates like staying in Kenya and paying very little attention to what Kenyans are saying: including David Ndii. But perhaps they could have listened to the National Economic and Social Council (NESC) but UhuRuto disbanded it but with no substitute in mind. That choice had a consequence which we are now seeing at play: no imaginative ideas to plan, run and manage the economy.

In like manner, I do not think the Jubilee government is prepared to listen to the likes of Ndii as long as men like Morales are around. After all the institution called the IMF is awesome: it is part of the Bretton Woods system. Who is Ndii after all? Or who are all these Kenyans crying loudly that they cannot afford Sh200,000 more to buy their second hand car.

Their loans and mortgages are being recalled because they “can’t pay and won’t pay” their loans due to the bank interest rates that are sky rocketing back to the levels once experienced in the Kanu years. And you are telling me to smile? No gloom! What utter arrogance Mr Morales!

So will Kenyans change their government to get one that will listen to them? The answer is difficult to come by, for Kenyans rarely vote with regard to their needs and more with regards to their hearts: particularly the “emotional chamber.” That is the chamber where all base instincts reside: tribalism, chauvinism, greed, bigotry, short-termism, opportunism, you name it.

This could and can change where ideological leadership achieves hegemony of ideas among the people: but the propaganda of the greedy ruling elites, dominant since independence, has always fought against and blocked this. This elite has murdered, assassinated, discredited, “monsterised”, “road-accidented” and rigged out such progressive leadership from capturing and controlling state power.

That is how they have managed to loot and under develop our economy. But we must continue to struggle against them and liberate our people however long it takes.