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How firm are the pedestals on which uhurunomics II stands?

By XN Iraki | December 3rd 2017 at 12:00:00 GMT +0300


An old colonial house in Happy Valley formerly owned by Sir John Ramsden. Preserving such heritage should be part of the great society project. (Photo: XN Iraki)

President Uhuru Kenyatta’s inaugural speech had two components, the political and economic. We shall leave the political component to politicians and their cheerleaders.

In passing we can add that economic success is intertwined with political success as every poll has shown since independence. We can boldly add that the economic problems Uhuru confronts today have a political element. At no other time in Kenya’s history have politics been that close to economics. This is another Kenyan peculiarity; just when we thought the two were separating, they became Siamese twins.

Let us go through Uhuru’s speech and extract the economics in it, what we are dubbing Uhurunomics II. Has anyone noted that Uhuru has become more religious lately? Is it the Ruto effect? Starting such an important speech with a religious sermon was quite unusual. How would Uhuru’s father have reacted? What about adding quotations from other holy books?

Uhuru was quick to show the achievement of Uhurunomics I, before projecting his economic vision. He praised devolution which has resonated well with majority. Suggesting that every county is a centre of economic development was interesting. From my discussion with counties, they are centres of development because they receive money from the national government. What of becoming the real centres by spawning new firms or attracting entrepreneurs and their FDI?

The change in ease of doing business to rank 84th globally was a feather in the cap. It was judged objectively by the World Bank. This makes Kenya the third competitive economy after Rwanda and Mauritius. The improvement in infrastructure with SGR as the flagship was highlighted. Healthcare and education are highlighted too.

Unfortunately, most of these achievements are drowned by politics and prolonged electioneering and the fact that Kenyans are very hard to impress whatever you do for them.

What of the future, Uhurunomics II? What are its pedestals?

The first is socio-political; rebuilding unity and nationhood, a realization that politics has a bigger effect on economics than we are willing to admit publicly. That was recognised in Vision 2030 and in all regimes since uhuru. The effect of electioneering on economics from boycotts to wait and see attitude might have informed this focus. Was it a deliberate effort to slow puncture the other side?

This pedestal should be deeper; it has remained shaky since uhuru with every poll shaking our economic foundation. Why should nationhood be threatened yet devolution is hailed as a success? What is the missing link?   Could reviewing the constitution after seven years experimentation fix the problem?  Did we oversell devolution focussing more on the money to be received than money to be generated? How much wealth have counties generated? How much FDI have they received? Data on county GDPs growth is needed.

The second pedestal is soft, healthcare based on people; it’s an extension of Uhurunomics I. 100 per cent Universal Healthcare coverage for all households would be a great leap forward. A healthy nation will be more productive. Why bring in private insurance companies? The Universal care has been very successful in Canada while in USA, private health insurance has been contentious, the cornerstone of Obamacare, now under attack from Donald Trump’s regime. Which model do we prefer?

Closely related to healthcare is housing which was in Jubilee and NASA manifestos. It is not clear how the 500,000 new homes were arrived at. But like healthcare, this touches on basic needs. The modalities of creating new homes are open.

Of special interest is how to reduce mortgage rates with interest caps. When shall we make rent more costly than taking a mortgage? How shall we reduce the cost of building? Competition can reduce the interest rates while improve in security can greatly reduce the cost of building materials. Why not use simple materials like plastics for walls, no need for costly metal grills or stones to keep off thugs. Seen houses in Europe or USA?

Job creation

The other pedestal is job creation, this should be the deepest. It is closely tied to the unity and nation building. Social strive is often driven by unemployment. Manufacturing has been targeted as the key job creator. An ambitious plan is increasing the share of manufacturing contribution to GDP from 9 to 15 per cent. Can we move up the value chain into design and manufacturing, beyond assembly? What happened to Nyayo car dream? The incentive to shift to 24-hour economy with cheaper tariffs from 10 pm to 6.00 am is laudable.

Why do we have an eight hour shift in Kenya, a less developed country while developed countries have three shifts? Why do Nairobi and other cities sleep at night? Why should we dance and drink the whole night but not work all night?

The focus on agro-processing is a step in the right direction. That might attract more young men to agriculture and make it “cool”. The use of irrigation and new incentive systems could improve this sector. Do you recall guaranteed minimum return (GMR)? The truth is that high food prices as population grows and land diminish will attract entrepreneurs into agriculture. Did you see greenhouses move from flowers to food crops?

Textiles and apparel, leather processing, construction materials are labour intensive and create lots of jobs.  Innovation and IT are our flagship while mining and extractives are still virgin. Why was oil and its associated industries not explicitly mentioned?

Value addition has been in our mind for too long, let us implement it and reap the benefits. Trade is a job creator, we need more of it. Kenya Trade as percentage of GDP was 38 percent in 2016 compared with South Africa 60 per cent or South Korea’s 78 percent.

A bold experiment was making it easy for other Africans to visit Kenya by getting visa at the airport. Copying from Ethiopia? Will this attract good guys or bad guys?  US attract lots of ambitious men and women to its shores who help transform and renew the economy. Shall we do the same? I applaud this initiative. It could cross pollinate us with new thinking leading to innovations. Immigrants have always been great entrepreneurs. Have ever wondered why “failures” succeed when they leave Kenya?

Reaching out to the next generation has always been the hall mark of great nations. Noticed how young kids are always in the field at the start of football matches in Europe? We need to do that more often in Kenya. Children are our future. If we reached them directly bypassing the adults we could restructure this country more quickly.

Improving access to quality education will improve our productivity and catalyse economic growth. But like any other vision it’s the implement that matters. Uhuruto has five years to realize the vision.

The writer teaches at the University of Nairobi.

Uhuru Kenyatta economy politics uhurunomics
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