A Letter to the 5th President of Kenya after August 9, 2022
THE STANDARD INSIDER
By Patrick Muinde | April 10th 2021
As I write this, I must first confess that I do not know who you are; but I have a clear idea of who you must be. As at the date of this letter, it is about 16 months before you face the wrath of disillusioned voters to get the mandate to lead and be conferred with the instruments of power.
I shall waste no time making reference to the shenanigans of coalition and alliance-making that you must survive to get the coveted ticket, nor the name-calling and character assassination that come with it. For that is our lot around here.
So allow me to address myself to three minimum thresholds of what you must be, and the realities you will wake up to on your first day in office.
First: Economic genius
The reason I score this number one is two-fold: one you’ll need real cash flow/hard money to run the affairs of the State and your administration; and two, to honour a huge public debt hole that has largely had no or negligible local economic transmission/impact.
As per official data, your predecessor’s regime had borrowed about Sh5.46 trillion to November 2020 compared to Sh1.165 trillion borrowed by the Kibaki regime. This excludes what will be borrowed between November 2020 and June 2021; an estimated over Sh3.4 trillion off-balance-sheet loans held in various State corporations; and the ongoing public-private partnership initiatives that must have been guaranteed by the State. Besides, the budget policy statement for 2021/2022 proposed to borrow a further Sh930 billion to June 2022. The past eight-year trend tells us that we’ll still overshoot the 2021/2022 target by June 2022.
On matters fiscal discipline, the undeniable fact is that the present regime has defied any basic economic logic and rationality. As a result, you will be inheriting an estimated budget deficit of over Sh1 trillion by end of the 2021/2022 fiscal year. While public expenditure has grown by about 3.7 times between the 2012/13 and 2021/2022 fiscal years, total government revenues has only expanded by 2.6 times over the period.
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The net implication of these events is that you will have no fiscal space to borrow with a huge expenditure framework not supported by a reliable and sustainable revenue base. Besides, anything taxable has been taxed including the hugely unpopular VAT on petroleum products and the one per cent turnover tax choking any semblance of life out of SMEs.
While people in official circles talk of an infrastructure legacy to inherit, the sad reality is that there is no evidence of trickle-down impact within the economy. These projects have been premised on a defective economic philosophy: a vendor-driven, foreign debt foreign contractor foreign supplies model that smacks of misplaced priorities. In any case, every single one of these projects has been dogged either by opaqueness on their contractual terms and therefore the true burden to the taxpayers, or astronomical corruption scandals. Inflated prices erode any chance of fair return to the economy.
In economic analysis, we further consider the implications of the prevailing environment. Therefore, it would be instructional to take into account all your predecessor’s regime has struggled through to craft a tangible sort of legacy. From a technical and analytical point of view, this would mean that official data is not entirely factual on the true state of affairs. Any economic projections will be modestly exaggerated.
In simple terms, the true state of the economy and the actual debt obligations will be grimmer than any official estimates you will get before you assume the instruments of power.
Second: Charisma and wit
The economic hardships that the average household has endured over the past eight years, amplified by the ongoing health pandemic, have been traumatic. It doesn’t help that official policy has been inconsistent at best and littered with gaffes. The outcome is a distrustful and rebellious citizenry. Any hope inspired by the 2002 elections, the economic recovery of 2002-2013 and the promulgation of a new Constitution on August 27, 2010, has long gone with the wind.
The events that have led to this state of affairs are by design, and errors of commission and omission by the political leadership across the divide. For instance, while the current regime campaigned on a youthful and digital generation platform, their affinity for old and tired wine has been legendary. While we respect and honour them for their many years of service to the nation, everything has an expiry date. Every generation must be given an opportunity to bring their talents and inject fresh ideas into nation-building.
The trolling of any government or political propositions on both social and mainstream media is a testimony to voter apathy. The mind-boggling financial scandals followed by empty rhetoric; unpopular and insensitive taxation; toxic business environment and insensitive policies towards small traders; and wanton official extravagance from the political class and the Executive have not made matters any better.
At the political level, the controversial election outcomes due to perceived or real electoral fraud and subsequent skewed public appointments have alienated a majority of the voting populace. It will be naïve to imagine the famed ‘Handshake’ miraculously cured this deep-seated mistrust. The apathy around BBI by ordinary folks is telling.
To inspire confidence and re-ignite the fire for us to willingly participate in nation-building, you will need the wit of Abraham Lincoln to mend a broken nationhood and the charisma of Nelson Mandela to inspire hope afresh and heal broken hearts.
Third: A vision we can feel, touch and relate with
Over several election cycles we have been lied to, conned, defrauded and incited against one another. Politics of ethnic mobilisation and tribal alliances that feed the greed of tribal kingpins and allies who can jump the highest to their bidding, no matter how disingenuous they are, has been our way of doing things.
But there are signals that those days are either behind us or are receding into oblivion. A case in point is the BBI narrative. Despite all the tribal heavyweights dancing to the reggae dance, it has had to be bulldozed through the various stages with State machinery, coercion or outright bribery. Folks across the land are still questioning how it serves their interests amidst a deadly pandemic; they are demanding to know how it will improve access to public services or put food on the dinner table; and, more importantly, the cost implications.
Given the not-so-inspiring data and evidence in the final months to election night, and amidst an unforgiving pandemic, you will need a simple, clear, ambitious yet practical plan of action to move us from the economic doldrums we are currently in. Whatever title you choose to give your action plan, it has to envision what socio-economic structures will serve us best 50 or 100 years to come, while providing practical solutions to livelihoods, household incomes and quality jobs and/or economic opportunities from your first day in office.
I don’t see how using the informal economy to hide from failed economic policies can be tenable. The tax revenue shortfalls and growing joblessness among our youth are a ticking bomb that will make political lies an impossible mission in 2022.
Armed with these facts and realities, the nation needs and desires a fresh breath of air among our top political leadership. These same old, tired recycled faces lack the imagination, courage and clean hands to drive comprehensive, decisive and definitive reforms that our motherland craves for at this moment in our shared history. Otherwise, we will be wandering in this desert of economic, social and leadership mediocrity for another 40 years.
God Bless Kenya.
Patrick Muinde, Ph.D
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