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Kenya won't develop if its politics aren't reined in

Monday February 27 2017

By BITANGE NDEMO
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“Kenya has great potential”. I have heard this statement countless times from foreigners visiting our country. 

But even with this optimism, our economic performance is flawed because politics trumps everything else in Kenya. In fact, politics is our Achilles' heel. 

In my blog post last week, I stated that our Gross Domestic Product (GDP) growth rate tends to dip in every election year. Some of those who responded challenged me to show that indeed that is the case. 

In this blog post, I intend to demonstrate that our problems start and end with politicians from all political persuasions.

The table below shows Kenya’s GDP growth rate from 1992 to 2016.  The data is inclusive of five election periods where in each case the growth rate was disrupted.  In each five-year period, we have an average of two years of growth.

The economy performed most poorly in 1992 and 2008. In 1992, Kenyans were agitating for political reforms, which the incumbent was opposed to,x and was using state resources to prevent.



IMAGE| BITANGE NDEMO

IMAGE| BITANGE NDEMO
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In 1993, Human Rights Watch released a report titled Divide and Rule: State Sponsored Ethnic Violence in Kenya,which summed up the elections as flawed, noting that “the results were marred by allegations of ballot-box stuffing and targeted ethnic violence in the Rift Valley Province.” 

The report implicated virtually all the top leadership in the incitement and coordination of the violence.

The aftermath of the 2007 elections left the country with lifelong scars as violence erupted in the Rift Valley, causing a political, economic and humanitarian crisis. 

Once again, politicians incited this violence but a contest of violence has no real winners.

Neither the inciters nor the victims won as lives were lost, people maimed or displaced and property destroyed. Economic growth dipped to its lowest level possibly since the Mau Mau War. It was a most foolish thing to do. We literary picked up a handgun and blew our own toe off.

In my view, we are all responsible for the kind of impunity that our politicians continue to practice.  We must step up and be part of the political process, but by this I do not mean that we should all run for office. 

VOLUBLE POLITICIANS

I am inspired by President Obama’s words in his farewell speech. He touched on one of the key issues that have bedevilled our potential to succeed - expecting change without involvement.  This is our greatest undoing – our failure to take on leadership.

According to President Obama:

It was on these streets where I witnessed the power of faith, and the quiet dignity of working people in the face of struggle and loss. This is where I learned that change only happens when ordinary people get involved, get engaged, and come together to demand it.

The least we can do in the coming elections is to get involved in setting the agenda and focus our leaders on issues that matter to us.

It’s hopeless for us to continue listening to non-issues expressed loudly by voluble politicians, yet there is a critical mass of professionals in Kenya who can lead discussions that will help ordinary people decide the future of our country, so that one day we can proudly proclaim that we’ve succeeded. 

This is perhaps why President Obama noted:

Our democracy won’t work without a sense that everyone has economic opportunity. Today, the economy is growing again; wages, incomes, home values, and retirement accounts are rising again; poverty is falling again… The unemployment rate is near a 10-year low.  The uninsured rate has never, ever been lower.  That, after all, is why we serve – to make people’s lives better, not worse.   

The crisis of strikes in the country is in essence caused by politicians. They have awarded themselves such huge perks that even a knowledgeable economist who understands the kind of wage bill this economy can sustain will side with the striking professionals. 

EXPLOIT YOUNG ONES

Imagine if the salaries of politicians and technocrats were reasonable and respected the intelligence of Kenyans.  We would all agree to a belt-tightening exercise until the economy was capable of supporting better salaries.

Unfortunately, we can’t do that right now because of the glaring inequalities in pay, even for people with similar skills and levels of education. Whilst on one side I feel for the patients, I truly sympathise with the doctors’ strike after a candid talk with one of them. They are not just fighting for money. 

Our hierarchical society is such that seniors exploit young ones. The young doctor tells me some of their seniors do not even know what's on their pay slip, which is how they left the situation to deteriorate that badly.

“The problem with this situation is that that we accept the inadequacies of the older generations even at times when we can correct things.  Instead we shy off as things continue to go bad until they explode. So when you see doctors on the streets, it is an explosion of anger that has been bottling up. It is a problem that afflicts virtually every profession in Kenya". 

“Many of our older consultants are, regrettably, stumbling blocks to younger colleagues whom they see as a threat to their comfortable lifestyle.  They run opulent consultancy services that rake in so much money that the consultants have no time to fight for their salaries.  In virtually every hospital in this country we (the registrars, majority of whom are young) are the workhorses.”

SIMPLE MATH

The young doctor adds:

The political class, through legislation, could change this. After many trips to Parliament, they are yet to understand our plight.   Surprisingly, some committee members in parliament are from the old school of medicine.

There are far too many strikes that require a comprehensive fix, but what we hear is blame on the World Bank for insisting Kenya cap its wage bill.  This excuse comes at a time when politics is destroying our economic growth prospects.

If the economy doesn’t grow, it means the GDP is not growing as fast as the need of people for better salaries.

The public sector wage bill, it is often recommended, ought to stay below 10 per cent of GDP. However, some countries exceed the threshold and compromise the development budget. 

As such, the only way to manage it effectively is to ensure a high enough economic growth rate, so that even when the salaries (numerator) go up, the denominator (GDP), is high enough to cover salary increments and allow more resources for development.

Legislatures must understand the simple math and become part of the solution to many of our problems.

When we drafted Vision 2030, the assumptions were that the economy would grow at a two-digit rate, at least, to support a growing country. Although in 2010 we almost attained that, anxiety for the 2013 elections was setting in and we have since lost track of the targets.

Just as the SMEs were beginning to enjoy credit from banks, politicians decided to cap interest rates for their own selfish ends.

The consequences are beginning to set in. The credit squeeze now hurts. The SME sector contributes about 35 per cent to GDP but that will be difficult to attain. 

HEFTY GRATUITIES

Anxiety of the coming election has begun to set in. The shilling has begun to weaken and despite capping interest rates, there is mumbo jumbo, with banks in which existing credit continues to attract the same repayment arrangements.  Central Bank has remained mum on this matter. 

We must revive the discussions and consciously seek to be part of our political process.

The Kisii County Assembly members decided to abuse the intelligence of the people by awarding themselves hefty gratuities even as we know there are thousands of young children who cannot afford to pay their high school fees.

Members of Parliament also are passing a bill to leave office with substantial benefits plus a pension that is higher than the salary of a hard-working doctor or lecturer.

These gratuities are illegal. An election is not a contract as such, and if it is, then one party is not being consulted in these increments.

Unless we stand up to stop all this nonsense, politicians will continue to run over our heads, making it impossible to achieve economic growth. As US President Donald Trump would say:

One of the key problems today is that politics is such a disgrace, good people don't go into government. 

I don’t know how good he himself is, but his point is clear.

 The writer is an associate professor at University of Nairobi’s School of Business. Twitter: @bantigito