Big government ideology is to blame for our economic woes

The big government's endemic inefficiencies have greatly contributed to Kenya's current economic crisis. [iStockphoto]

Treasury Cabinet Secretary Njuguna Ndung'u has asked Kenyans to brace themselves because 2023 will be a difficult year economically.

As experts scramble to find ways out of the current economic crisis, an area that has received little attention is the legacy of big government ideology that negatively impacts our economy.

By conventional wisdom, it is assumed that our politics is not underpinned by any ideologies such that we have even set goals in Vision 2030 to develop ideological and issue-based politics.

However, while it is true we do not have card-carrying Marxist and rabid ultra Conservatives, public demands and consequent government policies reveal a consistent ideology that is anchored in the idea that the government is our benefactor and the citizens are its ward.

Many attribute this view of government as a product of our African traditional governance systems where affairs of the community were managed centrally by a tribal council of elders.

To replicate this governance structure, fathers of the Kenyan nation adopted a version of African socialism after independence that is a mixture of free market ideas accompanied by centralised planning and State ownership of key enterprises.

Over the years the role of the government has become even more pervasive signified by ratcheting of welfare payments to the elderly, establishment of universal health for all and provision of affordable housing.

The centrality of government in the economy has also been reinforced by political rhetoric that constantly haps on the idea that the government is responsible for equitably sharing the national resources. Since Kenya's diverse communities are distributed regionally, the political imperatives of sharing the national cake equitably have buttressed the need for the government to continue playing its central role in the economy.

The recent visit to Nyanza by President William Ruto illustrated the extent of this belief where opposition leaders came out in large numbers in order to placate a government that is indispensable to the development of their region.

Despite the cultural and political justification, high maintenance costs of unwieldy big government and its endemic inefficiencies have greatly contributed to Kenya's current economic crisis. An indicator of the attendant high cost of big governments is public sector wage bill which averaged 11 per cent of GDP in 2006 to 2017 compared to the international benchmark of 7 per cent. The disproportionate expenditure on public wage bill is best exemplified by emoluments of 429 MPs which alone gobbled up Sh32 billion or the equivalent of combined budgetary allocation to Nairobi and Kiambu counties with a total population of 6.6 million.

On efficiency, a comment on parastatals attributed to Treasury PS says it all. According to him, not only are most of Kenya's 263 parastatals struggling, most are bankrupt and only survive through government bail-out. The shocking state of mismanagement and inefficiency has resulted in losses of Sh1.1 trillion due to stalled projects.

Politically, the central role played by the government in development and the general acceptance that it is indispensable for individual prosperity creates competition amongst communities to control the visible hand of the government. This creates instabilities that are not only bad for the economy but a real existential threat to the nation.

The argument that Kenya must change her underlying big government ideology to get out her current economic predicament stems from these economic and political concerns. In mature democracies, the opposition provides alternative ideas to lift the country out of the type of economic crisis we are.

In the US, for instance, the Presidency alternates between Democrats and Republican administrations leadership roughly every 10 years. The consequence of these political shifts is to alternate economic policies between liberal and conservative ideologies.

In absence of ideological parties, the Bretton Wood institutions and the donor community have provided the alternative economic ideology to ameliorate the adverse effects of our large government mentality. In the 90s, under pressure from conservative forces in the US and Britain, Kenya was compelled to accept structural adjustment programmes that resulted in deep cuts in spending. Today, the Ruto government is similarly under pressure in order to qualify for enhanced budgetary support.

-Mr Githieya is a political and economic Analyst