We're not out of the woods yet. The evidence is in the latest growth figures, the latest statistics on profits of major companies, revenue collection trends, government borrowing and inflation.
After performing relatively well in the first quarter when the economy grew by 4 per cent, the second quarter at 2.1 per cent was disappointing.
Kenya has suffered some serious shrinkage in economic activity. I am also not too happy with the pace of implementation of Finance minister Uhuru Kenyatta’s otherwise well thought-out Budget this year.
Most chief finance officers in the ministries are complaining that Exchequer releases this financial year have been uncharacteristically slow.
The same phenomenon is manifesting itself in the delay in implementation of the Sh22 billion economic stimulus package unveiled during the Budget.
The embarrassing confusion over delays in payment of hundreds of citizens who served as enumerators during the just-ended national census is another sickening example.
However, I still remain optimistic about our economy’s resilience and capacity to recover. The fundamentals, namely, favourable conditions for steady growth, rising productivity, and steady inflation are still sound.
That is why, despite depressed activity with our capital markets, KenGen, can still go to the market and successfully raise Sh15 billion for expansion. Although subscriptions for KenGen’s infrastructure bond are still on-going, pundits are predicting a huge over-subscription.
Yesterday, mobile company, Safaricom, went to the market to borrow a massive Sh12 billion. Safaricom’s borrowing is a five-year medium-term note that will come in tranches.
Investors will be allowed to choose between a floating rate note and a fixed-income instrument. There are still problems with the equity side, but the fixed-income side is doing healthy business.
Then there is the fact that all manner of foreign investors are all over town seeking private public partnership deals with the government in major infrastructure projects. I gather that the ‘‘green energy’’ project under the Office of the Prime Minister is attracting serious investors in their droves.
A group of Dutch investors has completed technical and financial feasibility work to build a multi-billion shilling wind farm in the Laisamis area of Eastern Province with a capacity of producing 300 megawatts.
An American firm, Astonfield Renewable Resources, whose president is a Kenyan-American Wall Street investment banker, Mr Ameet Shah, and which is currently building massive solar power projects in India, has also given the government a proposal to build a 100-MW solar plant in two years.
Admittedly, the domestic borrowing requirement for this financial year, at Sh109 billion, is a bit scary. But does it really matter if most of this money ends up building roads, developing electricity projects, new ports and doing feasibility work in building a standard-gauge railway line?
Never before has the government spent as much money as it is doing on roads today. And, the economic reasoning is sound indeed.
But political uncertainty is still this economy’s biggest political drawback. It is all fine to reel out details of how we have put in place a Committee of Experts, a Truth Commission, and dismantled the Electoral Commission.
But in my opinion, the government is right when it says it has scored very highly in terms of Agenda 4 reforms. However, it is not quantity per se that matters here.
There is a big difference between quantitative reform and qualitative change.
The soul of Kenya aspires to national harmony and fundamental change. But what you hear daily from our leaders is resistance and reluctance to effect decisions and policies, which foster compromise, inclusion and proportionality in public appointments.
The perennial turf wars between the Office of the Prime Minister and Mr Francis Muthaura, the controversies over the appointments of chief executives and boards of parastatals, and the recent furore over Ringera, are all manifestations of how the political elite is yet to fully accept that this society must bring to a closure the events of last year.
Indeed, the controversy over Mau Forest revealed just how easy it is to still to work up a whole ethnic group into a persecution complex — the very mood and mind-set we blame for some of the events that occurred in the Rift Valley in December 2007 and early last year.
We may have fared very well in terms of quantitative reforms, but our leaders have refused to discard the mental baggage of the past. As a result, we are still very vulnerable.