KARIUKI: Dr Ndii: Big theorist at the heart of State House

I believe Dr David Ndii must have overplayed his hand.

I am yet to meet him, but I have interacted and worked with some of his students. His accolades and economic mastery highlight the reputation of the accomplished tutor.

If I was an economics student, or an economist, being within the circle of Dr Ndii is quite an achievement. However, those in the business world will tell you that what’s taught in class does not always work in the real world. As a matter of fact, you are told to forget what you learnt in class and absorb situational, market and ‘ground’ realities.

The manifesto and agenda by the Kenya Kwanza team were quite impressive, well-thought-out and diligently articulated. The agenda clicked with the current socioeconomic and political scenario and subsequently led to the success of our current President, Dr William Ruto.

Those in the political sphere understand the role played by the economist in the design of the leading team’s agenda. The ability to understand and integrate the needs and expectations of a majority of the population was a masterclass.

Understanding the needs of the population and implementing policies are two different; or rather distinct realities. Theory and actualisation are two areas that researchers, scholars and academics have differed.

For instance, Kenya has some of the best and most proactive policies, including anti-corruption policies, in the world yet we lose 30 per cent of our budget through the same. Dr Ndii is now faced with the biggest task in his career, implementing his own ideologies.

The realities ‘kwa ground [on the ground]’ were not integrated in Dr Ndii’s revolutionary agenda. The fertiliser subsidy was a proactive approach, but without rain means the promise of food security is non-existent.

Also 2022 is said to be one of the hottest years on record, leading to heatwaves in the US, China and Europe. This means next year we’ll all be in the international market competing for basic food products.

Africa is definitely the underdog and there is a chance 2023 will be tougher than the current calendar year. Subsidising fertiliser prices will have a marginal impact on food production, and by extension, food security.

The rise in the Fed’s interest rates – an externality created to mitigate the record-high inflation levels – has curtailed Kenya’s hopes of achieving self-sustainability. Investment outflows will affect currency reserves and the performance of the Kenyan Shilling against external currencies, especially the dollar.

The cost of borrowing from the international market dims the hopes of lowering the debt and achieving the recommended GDP/debt ratio. We have to fill the budget hole by borrowing an estimated 800 billion. The international market is out of options, considering the cost of non-concessional loans. The local market is a potential option but at the risk of crippling the liquidity and ability of MSMEs to acquire financial muscle.

The proposal to cut Sh300 billion from the budget was a brilliant idea. But how can fiscal consolidation work while politicians will not accept the current economic realities? The refusal to remove the NG-CDF and the proposal to create a fund for the senators will further push up the recurrent expenditure.

The current administration is likely to compensate for this through greater taxation and reduction of the development fund. The low purchasing power from the high inflation rate will affect the performance of the private sector and the ability to meet the taxman’s demands. Fiscal consolidation will just be that; a term used in the administration, or rather, a theory proposed but not implemented.

There are two Dr ‘Ndiis’: The lecturer and the politician. He is a legend within the confines of the classroom but the same may not be said in the implementation of policies.

Dr Ndii, and by extension, the current government must understand the impact of external forces on the political, social and economic aspects of the nation.

OPEC diminished the hopes of stabilising oil prices, affecting the cost of living and ability to meet the promises made. But hey, I am a pessimist-optimistic kind of guy. I tend to see the problem before the solution.