Netizens have taken to social media to campaign for reduced prices as the country continues preparing for the general election.
I pity people who elect persons into positions of leadership and the acumen of leading isn’t in the DNA of the politicians.
There have been a lot of complaints about the poor state of the economy.
Indeed, many businesses have been closed down and a lot of people have lost their jobs.
It is therefore important to delve into this issue further especially because politics and the economy are nearly inseparable.
While 2017 saw the economy being affected by the electioneering period, 2018 benefited from the pent up activity before the 2017 general elections.
This was coupled with a stable political environment occasioned by the March 9 2018 handshake between President Uhuru Kenyatta and Raila Odinga.
However, 2019 was a difficult year economically due to the slowdown effect of the 2017 general elections coming to bear.
This was coupled with scarce liquidity in the market due to the crowding out of local investors due to heavy borrowing by the government and reduced bank lending to local investors as a result of interest rate capping.
During this medium-term period (3-year budgeting cycle), the national treasury exhausted and surpassed the debt ceiling without factoring in total sovereign debt that includes private sector and domestic debt as well.
Another dynamic is the borrowing by county governments and pending bills that have held up monies meant for Medium, Small and Micro Enterprises across the country.
A lot of businesses have been auctioned as a result.
The Budget Policy Statement provides a broad view of the state of the economy. It is quite telling that our economy is in shambles because we are living way beyond our means.
To be precise, we are mortgaged as a country as any increase in revenue will go directly to debt servicing currently at over Sh600 billion.
This means that for every Sh100 that we collect, we pay Sh46 as loans directly.
Currently, we have a literary zero budget for development expenditure.
It means that any road, water, electricity, school, or market project that you see being put up by the government, is from borrowed money.
At the county level, the situation is even worse since local revenue collection has been on a decline for the last five years.
Further, the return on investment on the huge infrastructural projects is yet to translate into real economic growth partly due to time factors but also the effects of inflated project costs due to corruption that compromises supervisory powers, hence durability.
Currently, our economy is growing at 6.2 per cent which is slower than our EAC partners, for the last 15 years. The actual growth is 5.7 per cent.
Our exports of commodities such as tea and coffee have dipped and been overtaken by remittances as foreign exchange-earners to stabilise the Kenyan Shilling.
Further, there is very little happening under the Big4 agenda, with only 228 housing units completed against an annual target of 500,000.
Manufacturing is nothing near being 15 per cent of our GDP with most containers bringing imports in-country returning empty.
While food security has been recently compromised by the recent locust invasion pandemic, the health sector reforms at the National Health Insurance Fund haven’t been implemented.
Duplication of the health functions at the national and county levels has only led to the wastage of limited and much-needed resources.
There is, therefore, a need for fiscal consolidation through serious budget cuts and audits for us to live within our means.
Further, the principle of subsidiarity needs to be applied effectively to reduce inflated government projects.
Our economy is nose-diving from all fronts let alone the looming cries for the reduced food prices that might plunge the country to rampant demonstrations and picketing from among the citizenry.
Communication practioner
Edited by Kiilu Damaris
