We must fix our politics first to restore ailing economy
By Isaac Kalua Green | June 6th 2021
In 2011 and 2015, the World Bank surveyed 644 and 848 Ethiopian enterprises respectively.
The survey revealed that compared to 2011, the innovativeness of Ethiopian enterprises had declined. One of the factors behind this decline was political instability which adversely impacted business. Unfortunately, with Ethiopia’s elections scheduled for June 21, the political situation remains volatile.
Violence in Ethiopia’s Tigray region continues to cloud the upcoming elections. Tigray has a population of seven million, almost six times the population of Mauritius. Thanks to this conflict and other factors, Ethiopia’s economy is predicted to register zero growth this year. This IMF forecast, together with the political instability, augurs ill for Foreign Direct Investment in Ethiopia. This proves that a country’s politics has a direct impact on lives and livelihoods.
Before the ill-fated 2007 elections, Kenya’s economy was thriving. Then came the elections and their violent aftermath. Consequently, factories shut their doors even as tourists cancelled their flights or fled the country. In 2007, a record one million tourists had poured into Kenya. If it wasn’t for the post-election violence, projections pointed to even more tourist visits in 2008.
In addition, SMEs were brought to their knees. In Kisumu alone, marauding crowds looted 184 stores. Eighty per cent of SMEs suffered huge losses. Further north in places like Turkana, inflation in the prices of vegetables and fruits reached highs of 200 per cent.
In the capital city, the Nairobi Stock Exchange lost about Sh40 billion in early January. Evidently, bad politics cost Kenya the loss of billions and more tragically loss of thousands of lives.
In Uganda, a report by the Economic Policy Research Centre (EPRC) revealed that in the final quarter of 2020, apprehension about the looming elections resulted in a dip in the perceptions of doing business in Uganda. This resulted in exchange rate volatility, insufficient demand and inadequate credit access among other unfavourable business dynamics.
These examples from Uganda, Kenya and Ethiopia prove that bad politics will always hurt the economy. A bad economy is the mother of societal challenges like severe unemployment. In this regard, if we want to fix our economy; to create jobs; to improve our healthcare and to transform this country, we must fix our politics. Our approach to tangible transformation must be guided by the tenets of political economy.
In 2017, we fixed our politics through the Supreme Court presidential election ruling and the handshake. This pre-empted the violence that had started rearing its ugly head. Thanks to such mature and stable politics, Kenya’s economic growth averaged 5.7 per cent between 2015 and 2019 making it one of Sub-Saharan Africa’s fastest growing economy during this period.
Once again, Kenya is hurtling towards the General Election. If history is any guide, politics will take centre stage as politicians compete for different offices. As the most coveted office, the presidency will attract intense campaigns and political machinations. However, Kenyans must not allow quest for political office to undermine economic growth, job creation or rip apart national cohesion. As Charles de Gaulle, former French President said, ‘Politics is too serious a matter to be left to the politicians.’
At this critical time in Kenya’s history, people regardless of status and profession – must step up to dictate tone, content, style and outcome of politics. There is no doubt that the politicians we have in power today is a true reflection of who we are either by commission or omission.
Accordingly, we must all participate in the political process as we would take on our own projects because our participation impacts on our quality of life. We must begin to reject politicians who perpetuate negative politics. We must say a big ‘No!’ to politicians who offer no solutions to the pressing issues of the day. Think green, act green!
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