Pride and prejudice will be downfall of Kenya

Section of Kenya's map

NAIROBI, KENYA: A year ago, it was inconceivable that a retail behemoth like Nakumatt would be in financial doldrums, much less on the brink of collapse.

A series of interlocking components have contributed to the imminent demise of this giant. These include gross mismanagement, poor strategic decisions, and internal losses brought on by wayward employees colluding with suppliers and customers.

Nakumatt started off as a one-shop family affair in Nakuru town. It rose to its peak as a leading supermarket chain boasting more than 50 stores in three countries.

It rode to great heights on a unique formula of locating its businesses near bus stations and residential and peri-urban areas. It appears that, proud of its phenomenal growth, Nakumatt pursued an expansion policy that precluded setting up in poorer neighborhoods.

It is alleged that the Atul family, the owners of Nakumatt, took great pride in their ability to steer the supermarket chain and were unwilling to admit that they had managerial shortcomings.

They would not broach the subject of an independent professional board to direct the affairs of the company.

They were not a listed company and did not come under the purview of any regulatory authority. Thus, there was no early warning system or safety net when Nakumatt began its steep decline.

Nakumatt’s downward trajectory offers important lessons to the leadership of Kenya. The first is that independent professionals are a prerequisite in the running of any large enterprise or country. To that end, the President must select his Cabinet carefully, with the right mix of political appointees and technocrats.

Regional balance

Second, there must be a deliberate effort to foster national cohesion through civil service appointments. These must of necessity reflect the diversity of our ethnicity.

Where entire communities feel excluded, there are likely to be attempts to sabotage government efforts through negative ethnicity and related propaganda. Third, we must be very strategic about how we engage in the next phase of development. Our policy of ‘looking East’ needs to be reviewed in terms of present and long-term efficacy. Where there is a surfeit of Chinese lenders giving egregiously huge loans without stringent conditions, an ‘abundance of caution’ is advised.

With new information emerging of Chinese intent, there is cause for alarm. According to Prof Brahma Chellaney of New Delhi-based Center for Policy Research, “China uses sovereign debt to bend other states to its will... and because China chooses its projects according to long-term strategic value, they may yield short-term returns that are insufficient for countries to repay their debt.”

Kenya’s debt stands at 56.4 per cent of GDP. Most of it is to China. That we are hurtling towards a financial precipice is no exaggeration, especially if seen in light of the soon-to-be-issued second Eurobond, essentially another loan to pay a loan.

We must undertake urgent reforms to stop reliance on expensive commercial loans and follow the fiscal prudence of former president Kibaki’s administration.

Focused leadership

Finally, national dialogue needs to be facilitated with a sense of urgency. A definition of what such dialogue entails is a starting point. As it is, the National Super Alliance (NASA) and the Jubilee Party have conflicting perspectives. To NASA, dialogue ought to revolve around reformation of national institutions, foremost among them the Independent Electoral and Boundaries Commission. Jubilee, on the other hand, avers that dialogue should be about development.

But there must be a point of convergence. Secessionist talk and notions of a second presidential swearing-in will not do. Nor will the insidious erosion of rights and liberties by agents of the State against perceived opposition strongholds.

And this is where the Preside must rise to the occasion as a symbol of national unity. He must have the prescience to steer the country from a destructive discourse. But he must himself lead by example by avoiding some of the pithy remarks that have marked his speeches during national day celebrations.

Every Kenyan’s wish for 2018 is that both Jubilee and NASA work at putting aside their pride and prejudice towards each other.

Each must see the other’s point of view without the filters that have brought on strife and contention. We must move forward as a country otherwise Canaan will remain a mirage and the four pillars of development as empty as the shelves of Nakumatt.

Mr Khafafa is the vice chairman, Kenya-Turkey Business Council.