Memo to President: Confront your corrupt buddies

Kenya's President Uhuru Kenyatta. FILE | NATION 

Uhuru Kenyatta Tuesday officially started his second and final term in office as President of the Republic of Kenya.

In the intervening period between the two presidential elections, Mr Kenyatta stressed that the elections impasse should end so that the proper work of economic development could commence.

For all the emphasis about economic growth as important and as the solution that all Kenyans should focus on, one does not see that this administration has had a strong record for Kenya’s growth agenda.

It begs the question what should be the priorities in respect of economic policy in the new term.

The President must fix his mind on what can be achieved within the five years, whose countdown has begun.

A big issue

The challenge that Kenya must deal with is the escalation in the amount of public debt. There is the argument that the debt threshold that signals danger has not been passed.

We may choose to believe what we wish to, but Kenya’s public debt is a big issue for two reasons. The first is not only that it has grown unbelievably fast in the last four years, but also that for all the increase of more than 20 percentage points, expected growth from the infrastructure investments has not followed.

Despite assurances from the Treasury that the debt was spent well and that investments in infrastructure will pay for themselves, it is clear that any sober person should be nervous.

We ought to be nervous because the real debt burden in Kenya is understated by only recognising the debt to multilateral, bilateral and private debtors.

The government has substantial debt liability from unfunded pensions for public sector workers, in addition to the debt guarantees on behalf of State corporations.

The chickens

Thus the President’s first task is to develop and publish a new debt management plan because debt expansion occurred under his first term and the chickens will come home to roost soon. Preparation with coherent responses is indispensable.

The second priority for this administration is to reset the fight against corruption. There is no doubt that government from top to bottom, including within Cabinet, is one mess of corruption and sleaze. The President’s economic development programme will not succeed unless corruption is reduced remarkably.

Mr Kenyatta will not impress anyone with more lamentation and hand wringing. The largest corruption cases on his watch not only came close to home but were also perpetrated by close associates who sell overpriced equipment and services to the public sector.

There will be no success if these people remain untouched and untouchable. All Mr Kenyatta’s hopes that he would unleash an unstoppable burst of entrepreneurial creativity and growth will come to naught unless these close associates and their counterparts in the public sector are confronted.

The thieves

And while he takes on this task, Mr Kenyatta should recall that it is not only a matter of decorum but strategic interest to show regard for the Office of the Auditor-General (OAG).

There is no stopping corruption in Kenya without studying the reports from the Auditor-General’s office and making the thieves in both private and public sector uncomfortable.

The OAG is an ally, even if the head of the institution is not the most admired public sector official in the executive branch of government.

The final priority for the president is to reenergise Kenya’s privatisation programme. There remains no doubt that privatisation has been a productive policy for the country’s economy.

Complete the job

And yet while the institutional apparatus for privatisation exists, there is a big balance of pending jobs to be completed.

This Privatisation Commission should be permitted to complete the entire balance of privatisation within the President’s term and be decommissioned soon after.

Privatisation would yield resources for retirement of the debt while also releasing the public sector to concentrate on services that it provides well.

So the memo to the President should read; manage the debt now, confront your corrupt buddies and complete the job of privatisation.

That’s enough work for a term of five years.

Kwameh Owino is the CEO, Institute of Economic Affairs.

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