Kibaki’s Economic and Anti-Corruption Policies have Failed Catastrophically in Kenya: Part 1
Many Kenyans remain pessimistic about the economy in 2012. According to an end of the year poll by Ipsos-Synovate, whose results were released on December 30, 2011: “the poor economic conditions experienced in 2011, evidenced by soaring fuel prices and ever increasing prices of consumer commodities, have made Kenyans pessimistic about the economic prospects in 2012.” The high cost of living and rising prices of basic consumer commodities are unbearable for the ordinary Mwananchi.
President Kibaki’s economic policies have sunk majority of Kenyans into deeper poverty, as they continue to bear the brunt of skyrocketing food and fuel prices. Although Finance minister Uhuru Kenyatta reduced excise duty on kerosene and diesel by 30 and 20 per cent (KSh2.16 and Ksh2.06) respectively in April 2011, petrol prices were increased by KSh9 and ranged from KSh111-113 per liter, countrywide. As usual, Kenyans ended up paying more for increased public transportation costs. In addition, government taxes on fuel ran between 45 and 55 per cent of pump prices, so the government reductions were meaningless. To make it worse, official corruption rocked the National Oil Corporation of Kenya (Nock), scandals which led to huge financial losses for the government, yet Energy minister Kiraitu Murungi failed to offer solutions. Eventually, it was the poor and helpless consumers who were highly taxed to compensate for the grand theft.
As an economist and the longest serving Member of Parliament, Kibaki knows virtually everything pertaining to the country’s economy, having served as the Permanent Secretary for the Treasury in 1963, then Assistant Minister for Finance and Chairman of the Economic Planning Commission the same year. Kibaki later served as Commerce and Industry Minister in 1966. From 1969 to 1982, he held the Finance and Economic Planning docket and in 2002, he was elected president on the platform of reforms to turn around the economy, which had been mismanaged by then-Dictator Daniel arap Moi, for 24 years.
Although Kibaki is lauded for the country’s improved economic growth, there is little to show by way of social capital among the majority of Kenyans. Revenue collection is at its best, yet most of the public institutions remain poorly managed and still offer low quality services. There is also a serious disconnect between the government’s investment priorities and that of the citizenry. For instance, the budget for expanding Thika Road is KSh27 billion and counting, yet many roads in other parts of the country are not being improved. Such a strategy adds up to the inequality of service delivery, since good roads are necessary for all Kenyans. Property developers are already attracted to Thika town because of the road infrastructure. In the long run, this will only amount to the cyclical one-sided economic prosperity within one region — a fact that has prevailed in Kenya’s history since Independence and which is fueled with tribalism and “it’s our turn to eat” politics.
Kibaki era billionaires
Lawyer Ahmednasir Abdullahi’s op-ed titled: “Voodoo economics and development corruption” (Saturday Nation, October 15, 2011), criticized Kibaki’s skewed infrastructural development that favors certain counties. He wrote: “For instance, the billions spent on the Nairobi-Thika super highway could have given us a dual carriageway from Mombasa to Nairobi or even beyond. Look at Nairobi itself. The northern parts of the city are undergoing massive infrastructure developments that open to central Kenya. The other parts are frozen in an underdevelopment capsule.”
His opinion on Kibaki’s economic policies was equally harsh. “With the shilling in a free fall, basic commodities out of reach for ordinary Kenyans, millions starving year after year, the poor getting poorer and the few privileged stealing more from the coffers of the State, Mr Kibaki’s disastrous economic policies will leave an indelible imprint on Kenya’s history far beyond his term.”
He also felt that, “the typical new billionaire is a man who was on financial death row in 2002. In 2003, he was appointed to head an important state organ. From 2003 to 2011, he has been benefiting through kickbacks in tenders and procurement.” In reality, there is nothing being done by President Kibaki to stop public funds from being siphoned into private hands, despite his repeated directives against corruption. It means that he has accepted and encouraged corrupt means of generating private wealth through State coffers. Ahmednasir fears that, “these billionaires, with their ill-gotten wealth, pose the greatest threat to stability in the next administration. They will probably try to destabilise it using their wealth.” Further, he asserted that by allowing wealth to be created illegally, Kibaki is deliberately promoting “communal empowerment” within a certain ethnic group.
Another piece published in the Nairobi Law Monthly titled: “Kibaki era billionaire flex their muscles” (May, 2011), suggested that Kibaki’s leadership has seen the emergence of more billionaires than the previous regimes. It also gave a historical perspective of how such billionaires “from one part of the country” were created. “The emergence of a new class of wealth owners is a tectonic shift never witnessed since the 1960s when then-Minister for Commerce, the late Dr Gikonyo Kiano, handed over enterprises owned mostly by Kenyan Asians to a select elite and motley Murang’a business operatives. Since then, the only changeover in business would involve unsophisticated speculative grabbing of property by Moi operatives and a group of newly rich Kenyans of Asian origin who took advantage of the arbitrage of Rift Valley power brokers.” Murang’a County in Central province has 12 billionaires who emerged during the era of President Kibaki.
Is Vision 2030 realistic?
On October 30th 2006, President Kibaki launched the process of Vision 2030, which is the blueprint for transforming Kenya into a middle-income economy, covering the period 2008-2030. If implemented successfully, all Kenyans will have a high quality of life by 2030. However, in a Wikileaks cable released in September 2011, the Vision was criticized for being just another of the many sugar-coated government dreams. Former American Ambassador to Kenya Michael Ranneberger, noted in 2007 that: “Vision 2030 often reads like a naive call for a perfect society, smacking a bit of old-fashioned socialist central planning.” The cable claimed that the Kenyan government is good at charting development plans but does not implement them. “But with the right leadership and a little bit of luck, Vision 2030, even if only partially successful, could help frame a reform agenda that puts Kenya on a higher growth path,” he wrote.
How does the Kenyan government expect to join the middle-income category if say, it cannot invest heavily in research and development? With grand cash theft in the free primary education (FPE) program, what kind of skills-base is it building among public school children? The 2011 results of the Kenya Certificate of Primary Education (KCPE) were an indictment of the poorly-run program, especially without adequate teachers to impart basic literacy skills.
Kibaki’s administration keeps shocking Kenyans. Last year, the Education Permanent Secretary Professor James ole Kiyiapi, said that trained teachers were allowed to seek employment outside the country, since they had no local opportunity on a permanent basis. It is ironic that the education system lacks teachers, yet those trained using taxpayers money are jobless. This is a typical sign that the whole system is in crisis.
What can the government learn from Cape Verde that became a middle-income country in 2007? Its country brief by the World Bank states: “In December 2007, Cape Verde achieved middle-income country status. Good governance, sound macroeconomic management, including strong fiscal discipline and credible monetary and exchange-rate policies, trade openness and increasing integration into the global economy, a responsible use of donor support, and the adoption of effective social development policies have produced impressive results throughout the Cape Verdean archipelago. Growth in real income per capita reached more than 5 percent during 2005-08, well above the average for Sub-Saharan Africa and for Small-Island States.”
Further, what can Kenya learn from the former Asian Tigers that invested heavily in higher education, research and technology, to leapfrog the Western models of economic development? Final part to be continued on Thursday this week.