How Kenya Kwanza turned a perfect storm into a crisis in two years

 

When historians document our present third decade of the 21st century, we may reserve a special chapter for the current Kenya Kwanza administration on how to elevate a “perfect economic storm” into a “polycrisis” in 24 months. 

These were the “hatupangwingwi” leaders who said that in 2022, they focused on fixing the economy without focusing on corruption.

For them, this storm reflected global economic uncertainty, domestic fiscal (and debt) distress and long-standing structural economic imbalance. Their answers sought initial economic buffers first then resilience next, (painful) fiscal consolidation and “bottom-up” economic transformation.  The short story here might be that each part of this storm ended up in an unfortunate scandal.

Two years later, we enter the final quarter of 2024.  Yet it feels like this Kenya Kwanza regime has been here for a decade.  From battling for its agenda in our courts to battling Kenyans in public protests, we have our homegrown Groundhog Day where everything repeats itself daily.

To be fair, this has been the state of political Kenya for decades, but the growing anger and disappointment with Kenya Kwanza of many promises is they ended up as our worst-ever post-independence administration, just behind the previous Jubilee administration. This sounds harsh, but these regimes inherited a progressive constitutional dispensation, yet fumbled into old habits.

Let’s stick with Kenya Kwanza as the current people in charge.  A well-acknowledged perfect economic storm in 2022 is now today’s 2024 polycrisis.  Polycrisis is a term that gained currency during the Covid-19 pandemic to express the multiple crises – lives, livelihoods, living - that countries were forced to confront all at once.  Again, to be fair, modern times are all about volatility, uncertainty, complexity and ambiguity (VUCA), rather than the good old days of stability, certainty, simplicity and clarity.  In other words, we must thrive amidst the chaos.

But our current polycrisis seems both self-inflicted and serendipitous in the way in which every crisis seems to distract us from the next.  Is the Deputy President’s proposed impeachment a distraction from the controversy around recent airport, energy and healthcare Public Private Partnership (PPP) deals?  Are the PPPs a distraction from our deepening fiscal crisis?  Or is the impeachment the distraction?  Does all this transactional dealmaking we seem to be doing mask our escalating economic crisis?

Are all of these distractions from the relentless push to roll out universal health care at any cost?  Might any be a distraction from Kenya’s surprisingly low key and low decibel presence at UN General Assembly (UNGA)? Could it be that these crises sidetrack us from realising that maybe those recent Gen Z protests basically replaced Kenya Kwanza’s manifesto with a brand new, accountability marking scheme?  Or distract us from their AI-led implementation nightmares with university funding and Social Health Insurance Fund (SHIF)?

What we see today looks like a whirlpool of distractions, but it is a self-inflicted polycrisis. This is Kenya Kwanza’s job to fix, but let’s innocently comment on four elements of the state of chaos.

The first is the DP’s impeachment (assuming he is not “forgiven” in our uniquely “Kanu-esque” political way).  My simplistic take is whatever dissonance there was with the President started off as a path of public distraction that is now a Thika superhighway towards political destruction.

The DP did not help with his “shareholder” language, though Mount Kenya gave the President 41 out of every 100 votes he won in 2022 (his home Rift Valley gave him 25).  More recent “kingpin” discourse only throws a harsh spotlight on Mount Kenya’s perceived “entitlement to power”.

Yet Kenya National Bureau of Statistics (KNBS) 2022 data shows Kenya’s economic cake Gross domestic product (GDP) is four near-equal slices (regional economic blocs).  Nairobi makes up 27.5 per cent but Lake/Western Region (LREB) and North Rift (NOREB) are collectively larger at 28.2 per cent.  Mount Kenya (CEREB) comes in at 24.1 per cent, and the rest of Kenya (JKP – Coast; FCDC – Northern Frontier Counties, SEKEB – Ukambani Counties and NAKAEB – Narok-Kajiado) contributes 20.2 per cent.  A sideways question is who “owns” our Nairobi metropolis?  Oops, did someone just say 41 vs 1 in 2027?

The second element of this polycrisis is our deepening fiscal nightmare.  We have real debt pressures and liquidity challenges with below-par tax collections at a time when we seem to be in a stand-off with the IMF on our fiscal consolidation effort.  That Bloomberg this week reported a search for “petrodollar borrowing” as an emergency alternative pretty much summed it up.

While these first two, political and fiscal, seem obvious, the next two are not at first glance.  So to energy and infrastructure, or specifically, electric power and air transport/aviation.  The first name that springs to today’s public mind is Adani who have a signed-off PPP concession with Kenya Electricity Transmission Company Limited (KETRACO) for power transmission, and a PIP PPP proposal with Kenya Airports Authority (KAA) for Jomo Kenyatta International Airport (JKIA) concession.

Take the name Adani out of the equation and what do we have?  First, serial past underinvestment in the electric power and aviation sectors over time.  Second, insufficient public cash flow plus an inability to borrow to finance this backlog and forward investment.  Third, a choice to attract investment through private sector participation with or without out competition or do, say, a public initial public offering (IPO).  The crisis is not Adani’s PPP/PIP, due diligence notwithstanding, it is lack of investment.  Sadly, we end up fixing this investment problem through fresh cronyism as looting.

Which brings us to our final unusual crisis.  If we start with Kenya Kwanza’s flagships – the five Bottom- Up Economic Transformation Agenda (BETA) pillars - we observe that each is either in or out of court at any moment in time.  Remember agriculture and genetically modified organism (GMOs).  Digital and Maisha Namba. Micro-, Small and Medium-sized Enterprises (MSMEs) and the Hustler Fund.  Then, of course, Universal Health Care and its alphabet soup (SHA, SHIFT etc.) and Affordable Housing.

However, when we throw in education (competency-based curriculum (CBC) confusion and the controversial university funding model) and even Privatization (with Kenyatta International Convention Centre (KICC) most recently ruled a national monument), this is more than litigation.  It is a crisis of competence in the design, development and rollout of these fine ideas, from policy at one end to process, systems, technology, structures and staffing at the other.

This is the crisis that has turned Kenyans away from manifesto promises to bread and butter issues.  If Kenya Kwanza’s polycrisis is a hurricane, this is its eye, its core.  The smart idea is to push all of these ambitions to 2025 and sort them out without per diem-rich Task Forces.

Because if you can’t get the pillars of your agenda right, then everything else becomes a news headline. Of course there’s more to this polycrisis when law and order equals rule of law, state monopoly of violence notwithstanding.  But that’s the different story about rule of law leadership.

DP impeachment is a cacophonous sideshow.  The reality is likely about real transparency and accountability in our fiscus before we are called for taxation. It’s probably about more truth on energy and infrastructure before endless international field trips as deal making missions.  At bottom, they got the agenda correct, but delivery is all wrong.  This is their self-created polycrisis.

Dennis Kabaara is a management consultant