Two months into power, I am still trying to define Rutonomics. What economic direction will the new regime take? Beyond undoing what the previous government did, has the new regime come up with its own “economic soul“?
Two months is a short time in economics, but it’s long enough to give intentions. I have switched on my economic searchlight. Let me explain what I have found out.
The light is diffused by a political fog espoused by an incomplete government without principal secretaries and campaign echoes.
Will Rutonomics focus more on the public or private sector?
Think of it, the State employs only about 800,000 Kenyans. The private sector, more so the informal sector, has the jobs. But they are not considered proper ‘jobs’ as they lack pension and job security.
There is consensus that the private sector is the engine of economic growth. Unfortunately, money is more easily made in the public sector, remember tenderpreneurship?
Will Rutononomics, like Kibakinomics, focus more on the private sector? I am leaving out Uhurunomics because it was a logical extension of Kibakinomics.
One economic worry is allowing the public sector to crowd out the private sector by competing for scarce funds or coming up with laws that are anti-business but popular with the political base.
There is a big divide between the two sectors with those in the public sector thinking the private sector is greedy and heartless and refuses to share its huge profits with the public.
Those in the private sector wish the public sector was more efficient, making decisions faster.
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There have been bold attempts to infuse private-sector thinking into the public sector. Moi started with his dream team led by the late Dr Richard Leakey. Kibaki and Uhuru extended that thinking with the private sector as the lynchpin of their regimes. Will Ruto do the same or ‘public thinking’ will take precedence?
Someone has whispered to me that the ghosts of Kanu must be exorcised. No Kanu II.
What of the market economy? Is Kenya Kwanza statist or market-oriented? Removing subsidies despite the pains was a bold move and seems to signal that Rutonomics is a firm believer in the market system.
But when we heard that an interest rate of over 10 per cent is too much, we got concerned. Uhuru tried to cap the interest rate. He did not go far.
How did Kibaki bring down the interest rates to the extent that banks started hawking loans on the streets?
He got IPOs (initial public offerings) and gave Kenyans freedom to talk, innovate and run their businesses without worrying if big brother was watching them.
The feel-good effect after long years of Kanu was also a factor in accelerating economic growth. How are we feeling about Kenya Kwanza?
Rutonomics has not clearly given its monetary and fiscal direction. While a low-interest rate regime is its desire, the global trend is for higher interests to curb inflation. Central Bank seems to be in tune with global trends on raising interest rates.
Except for the green projects agreed on with British Prime Minister Rishi Sunak, we have not heard of mega projects like the standard gauge railway (SGR) in Kenya kwanza.
Did they say they will complete the existing projects first?
Some of the most anticipated mega projects are in soft areas like education, health or even culture. For example, how shall ensure our indigenous languages don’t become extinct?
The key plank in Rutonomics is how he shall address the key factors of production.
Land is always contentious. We saw what happened during the Kanu era. Keen observers will note that except for forests, no public land is available for gifting loyalty.
And the price of prime land has risen through the roof. Will that tempt those in power to use shortcuts - read corruption to get land?
The emotions tied to land make it a political hot potato. How will Rutonomics handle land with hustlers in mind? Capital is best espoused by the hustlers’ fund. Add banks which were hit by Covid-19 and the war in Ukraine just as they are recovering.
Add the State’s appetite for borrowing and it’s not hard to explain why rates are going up. And the depreciation of the currency.
Labour is in surplus and Rutonomics’ biggest headache. How do you create jobs in the shortest time possible? How do they keep hustlers, their key voters, busy as they await growth and trickle-up?
A growth of above 10 per cent would start absorbing this labour force. Can Rutonomics hit that magical rate set in Vision 2030?
Is Ruto coming up with a new vision? Entrepreneurship is the heart of Rutonomics with bottom-up economics.
Will he make entrepreneurship honourable and attract top students? Shall he catalyse innovation more so in fintech? Why are digital lenders being regulated like banks?
Beyond the factors of production, Rutonomics has not given us a clear path on how to navigate and leverage on East African Community and African Free Trade Area.
On the global arena, shall we face East or West? This broadening of our market and influence is drowned by the call for more counties. Yet we should be reducing the number of counties to benefit from economies of scale.
The few jobs in the county government are a big attraction, but more would be created if we focused more on the private sector.
We can’t leave out the elephant in the room - inequality. How will Ruto handle that? How will Rutonomics balance trickle-down and bottom-up economics to benefit the greatest number of citizens?
Rutonomics seems too cautious. Why no decision on simple things like where the junior secondary school should be domiciled? Why give criminals a whole month to surrender their guns?
One possible explanation for caution is the narrow margin of victory in the polls and that the two key leaders in Kenya Kwanza worked for the government and are used to the slow pace of decision-making.
My hunch is that in six months, the real Rutonomics will emerge.