Middle East oil deal shows need for bold policy formulation

A fuel pump operator fuels a motorbike at a petrol station along Kenyatta Avenue, Nairobi. [Edward Kiplimo, Standard]

Recently, the government announced specific policies - reconsideration of the government-to-government deals with Middle Eastern oil producers and stabilisation of the price of fuel - that were pilloried by many to be about-turns.

Two lessons emerged from the ensuing discussion.

First, we still lack a coherent process of policy communication. Most people, including "experts" appear not fully aware of what prompted the policy moves.

Second, lack of clear policy communication breeds a sense of uncertainty, which in turn makes it harder for private actors to plan their economic futures.

Changing policy positions is not necessarily a bad thing. As the saying goes, wise people change their minds while fools do not.

It is therefore perfectly fine that after trying to implement specific policies the government looked at the outcomes and decided to change course.

The goal ought to be to improve Kenyans' material conditions, not to prove a point. With this understanding, change in the direction of better outcomes is more than commendable.

At the same time, how people perceive policy change, matters. And here is where policy communication comes in. As I keep arguing, we are an increasingly complex economy that can no longer be micromanaged at every instance.

Therefore, we are likely to thrive when the government does the job of publicly outlining policies and parameters of economic activity, then getting out of the way.

For this set up to work, relevant economic actors need clear information not just about policy choices, but the processes through which government makes policy.

Clarity in communication and fidelity to well-defined processes and outcomes is what makes the difference between a government perceived to make and change policy in good faith, and a flipflopping administration groping in the dark.

You cannot inspire entrepreneurship and risk-taking - both of which are essential for rapid economic expansion - by projecting the image of a flip-flopper.

In other words, it is important for President William Ruto and his economic team to ensure their (needed) policy interventions in the economy are not mistaken for unprincipled meddling.

To that end, they must communicate clearly, assiduously focus on producing demonstrable outcomes, and avoid the temptation to micromanage every sphere of economic life.

If they do so, Kenyans of goodwill will cut them some slack for changing course and learning from mistakes.

-The writer is an Associate Professor at Georgetown University