Persons that will shape the economy in 2022

Ukur Yatani- Cabinet Secretary for National Treasury at Parliament Buildings, Nairobi. June 10, 2021. [Jonah Onyango, Standard]

This year will be all about the economy. None other than politicians gunning for the highest seat in the land have signalled that the narrative this year will be on how to transform the economic fortunes of ordinary wananchi.

Politicians and their promises aside. There are individuals whose roles in 2022 are expected to profoundly shape the business landscape in the next 12 months. 

This list includes a Cabinet Secretary, technocrats, regulators and CEOs of some of the country’s blue-chip companies. 

Ukur Yatani- Cabinet Secretary for National Treasury

Ukur Yatani is the man in the eye of a storm. He is expected to guide the economy from the turbulence of Covid-19 pandemic. Last year, the economy contracted after the government put in place containment measures aimed at curbing the spread of coronavirus. A lot of businesses were shut down, rendering a lot of workers jobless.

The economy has since started to recover, but there are still some risks ahead. Yatani is still expected to shield the economy from the uncertainty associated with the elections.

There will also be pressure for the National Treasury to allocate more funds for this year’s elections and President Uhuru Kenyatta’s flagship projects ahead of his exit.

Kenyans will also be watching Yatani as the government continues to restructure some of the fledgling state corporations including Kenya Airways, Kenya Power and the four largest universities.

 Patrick Njoroge- Governor of Central Bank of Kenya 

In the financial sector, all eyes will be on the Governor of the Central Bank of Kenya (CBK) as he starts to regulate digital lenders. There is a consensus that digital credit providers have treated consumers badly. Besides charging crazy interest rates, they have also breached the privacy of consumers by calling their relatives and friends in their recovery efforts. Already, CBK has crafted the necessary regulations which are currently been subjected to public participation.

Additionally, CBK boss will be expected to stabilise the country’s exchange rate. Since the outbreak of Covid-19 pandemic in March last year, the Kenyan Shilling has weakened trading at 113. 14 against the US Dollar.

Patrick Njoroge- Governor of Central Bank of Kenya. [File, Standard]

Monica Juma, Cabinet Secretary Ministry of Energy

Kenyans are pegging a lot of hopes on the low cost of electricity on Ms Juma, who was recently appointed Cabinet Secretary Energy. On her appointment, she was tasked with the implementation of recommendations by a taskforce that had been reviewing contracts between Kenya Power and electricity producers. One of the key recommendations was a 30 per cent reduction in the cost of power by December 2021. While this was not achieved by the December 24 deadline and instead there was a 15 per cent reduction, President Uhuru Kenyatta promised another 15 per cent reduction in early 2022.

Juma is not just expected to deliver the reduction in the cost of power – which will reflect in lowering the cost of living – but also reform the power sector, including turning around Kenya Power as well as reviewing contracts that the firm has with Independent Power Producers (IPPs).

 James Mwangi, CEO of Equity Bank and Joshua Oigara, CEO of KCB Bank 

The two are the CEOs of Kenya’s largest banks. This year, their rivalry will rise a notch higher with KCB keen to enter the Democratic Republic Congo. Already, Equity Group, the largest bank in the region by capital size, has already made an incursion into DRC. Kenyan banks have already risen from the ravages of 2020. After enduring a difficult period owing to the adverse effects of Covid, a lot of them made a come-back in 2021 registering decent profits. This has expanded the balance sheet of some of the largest banks like KCB and Equity. These banks will use the money, not only to lend more but also to expand into the region. 

Allan Kilavuka, chief executive Kenya Airways 

Kilavuka will have yet another tough year steering the national carrier. This is especially following the shelving of plans to nationalise the airline. KQ had hoped that the conclusion of the nationalisation process would put it on a much better footing to compete as well as further entrench Nairobi’s position as a continental aviation hub. 

In addition to the airline’s ownership reverting to the government, the plan also entailed merging KQ’s operations with those of the Kenya Airports Authority (KAA) and giving it a much larger role in running the Jomo Kenyatta International Airport (JKIA). 

These plans might not however come to fruition as the government drops plans to nationalise the carrier. The state will instead roll out an Sh147 billion ($1.3 billion) multi-year restructuring programme that includes taking over its debts. According to a recent report on Kenya by the International Monetary Fund (IMF), Treasury will take over KQ’s debts to the tune of Sh93.5 billion and offer the airline Sh53.5 billion in direct budgetary support to clear overdue payment obligations and cover upfront costs of restructuring.

In the restructuring, the airlines will roll out measures such as reduction of frequency of flights, cut its fleet size and lay off staff in its bid to turn around. KQ also has the challenge of 2022 being an election year for the country, with history showing that such times usually have an impact of slowing down travel. 

Phillip Mainga, managing director Kenya Railways 

Kenya Railways will be in the limelight for its role in reducing the cost of imports and exports, and the impact of the Standard Gauge Railway (SGR) on the coastal economy. From May, the operation of SGR is set to revert to Kenya Railways from the Chinese operator Afristar. Afristar - Africa Star Railway Operations Company – a subsidiary of the firm which built the railway (China Road and Bridge Corporation – CRBC) was formed in 2017 to operate both passenger and cargo services. 

It was expected to manage the railway for a period of ten years but KRC in early 2021 said there were clauses that allowed it to review after five years and decide whether it wanted to continue working with the operator for the remaining five years. Following a review, the corporation said it had decided to take over the operations of the new railway line.

Phillip Mainga, managing director Kenya Railways. [Elvis Ogina, Standard]]

KRC said it had already taken over certain functions such as ticketing, security and fuelling of locomotives. The remaining functions were to be taken over in the course of 2021 and be completed by May during the five year anniversary of the SGR.

Other than SGR, the corporation has in the recent past rehabilitated the old metre-gauge lines including the Nairobi-Nanyuki line and the recently concluded Nakuru-Kisumu line that restarted operations in December 17.

Peter Ndegwa, chief executive Safaricom

He will be leading Safaricom’s foray into Ethiopia, critical both for the company but also for Kenya, whose interests in the Horn of Africa country remain limited despite being a neighbour. Safaricom expects to launch commercially in Ethiopia by mid-2022 and has already started making preparations including the search for a physical location to serve as its offices in Addis Ababa. 

While it has pushed on with its plans, these have been disrupted by the conflict in the Tigray region and has at some point had to evacuate some of its staff from the country. 

Ethiopia is second-most populous in Africa, presenting a great opportunity for business and investments and many Kenyan firms are watching Safaricom’s moves. 

Ndegwa will also have to grapple with the decision by the Communications Authority of Kenya to reduce the Mobile Termination Rates (MTR) to Sh01.2 from ShSh0.99 could be among the key issues that shape the telecommunications sector in 2022. Safaricom has opposed the move and appealed against CA’s decision but Airtel and Telkom Kenya welcomed the decision.

MTR, which is a fee one operator pays its rival whenever calls originating from its network terminate into the competitor’s network, has in the past been a subject of vicious price wars. In 2010, when CA halved the rate to Sh2.21 from Sh4.41, there was a major price war, with players also reducing their call rates by 50 per cent, a move celebrated by subscribers who then paid about Sh8 per minute for voice calls.

While this might not result in a similar price, it could reduce the barriers to entry to the country’s communications sector. It will also enable players to save cash that they pay rivals, possibly investing the same in improving their infrastructure and products.

Peter Mathuki –The Secretary-General of East African Community 

Dr Mathuki was in April 2021 appointed the head of the EAC secretariat and one of the immediate tasks he has to oversee is the admission of the Democratic Republic of Congo into the regional bloc.

The EAC Heads of State during a December 22 extraordinary summit adopted a report by the EAC Council of ministers on the admission of DR Congo into EAC. The presidents then directed the EAC Ministers to “expeditiously commence and conclude negotiations with Dr Congo for admission to the EAC” and report back to the heads of state at their next summit. The admission of the mineral-rich country into the EAC bloc is expected to offer opportunities for Kenyans as well as other EAC citizens and companies, by easing the movement of goods and people.

Ezra Chiloba, director-general Communications Authority of Kenya (CA)

 With 2022 being an election year, the heavy focus will be on the telecommunications industry regulator. The Authority has a major role in regulating political messages aired on all media platforms including TV, radio, print and digital.

Ezra Chiloba, director-general Communications Authority of Kenya (CA). [Courtesy]

CA also has a key advisory and monitoring role in the transmission of election results, making Chiloba’s job one that will be heavily scrutinised in the course of the year.

This will be in addition to his job of policing the ICT sector in the country.

Chiloba has been on the job at CA for three months and has already ruffled quite a few feathers.

The former boss at the Independent Electoral and Boundaries Commission (IEBC) assumed office at CA in September and has since then shut down, or initiated the process of shutting down, a number of TV and radio stations for what CA said was a failure to comply with licensing requirements.

The regulator has also recently reduced Mobile Termination Rates (MTR), much to the chagrin of the market leader Safaricom that has appealed CA’s decision.

Richard Ngatia- President of Kenya National Chamber of Commerce and Industry (KNCCI) 

As the President of the Kenya National Chamber of Commerce and Industry (KNCCI), Richard Ngatia will be expected to play a critical role in helping private sector businesses, especially small and medium enterprises (SMEs), find a footing this year.

The last two years have not been very good for SMEs, most of which were affected by the adverse effects of Covid-19 pandemic.

Most of them will want to re-invent themselves in 2022 by accessing cheap credit and manoeuvring the red tapes. Ngatia’s KNCCI will be at the heart of this. Mr Ngatia, the Managing Director of Megascope Healthcare Limited, is also eyeing the seat of Nairobi Governor and will leverage on his achievements at the chamber of commerce to become the CEO of Kenya’s capital city.