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ECONOMY: Why is the growth not trickling down to the masses?

Wednesday August 02 2017

A debate meant to give Kenyans an opportunity to assess the suitability of presidential candidates ended in an anti-climax when only four of the eight contenders turned up, with President Uhuru Kenyatta, the Jubilee Party candidate, the notable absentee.

However, the nearly 10 million Kenyans who tuned in for the debates got some pointers from the four candidates led by opposition National Super Alliance flagbearer Raila Odinga on the problems facing the nation and how they would tackle them.

The EastAfrican’s Peter Munaita looks at the 10 issues that have dominated the election campaign but fears that they may not be the deciding factor on who wins on August 8.

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1. COST OF LIVING: Why are prices of unga (maize flour) and sugar out of reach?

The cost of living was shaping up to be a potential election decider until the government came up with a subsidised maize flour programme....

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2. FOOD SECURITY: Where will the next meal come from?

Who will be bold enough to address the vexing question of land fragmentation and excision of fertile agriculture land for real estate despite the constitution allowing Parliament to prescribe the minimum land holding for various land uses?

3. UNEMPLOYMENT: Where will 12 million jobs come from?

The unemployment rate in Kenya is high even by African standards with 40 per cent of the adult population reported to be jobless.... In the Kenyan context, what constitutes work is important.

4. CORRUPTION: Who steals $3 billion from the public purse each year?

There is an uncanny semblance of the Kenya election cycle with massive cases of corruption. In 1992 there was Goldenberg, Angloleasing in 2002, depletion of Strategic Grain Reserve in 2007 and, presently, the unresolved NYS and health ministry scandals are just some examples.

5. THE ECONOMY: Why is the growth not trickling down to the masses?

“You have to be involved in the markets,” former Central Bank governor Njuguna Ndung’u once told a symposium on why the low inflation and interest rates and the high economic growth rates were not being felt in the streets.

The question, then as now, had another element to it: Why is Kenya's growth not creating enough jobs that would pull many out of poverty?

Prof Ndung’u’s argument was that the low interest rates could only benefit those who were borrowing.

Quite logical then that any government would focus on sectors that impact directly on a bigger number of the population in order to make the rosy numbers meaningful. Since 2003, however, that has not happened in Kenya. The policies have tended to favour big ticket infrastructure projects like the SGR which will only benefit the traveller, the operator and the cargo transporter.

For it to have an impact on the masses, the cargo transporter would have to pass the benefits of lower haulage costs down the value chain. Unfortunately in capitalist Kenya there is no way of enforcing that.

READ: Sluggish Kenyan economy hit by multiple negative factors

The trickle-down economics of the Jubilee and the Grand Coalition government before it have largely left Kenyans sceptical of public investments, explaining why Jubilee is still finding it difficult to sell its re-election agenda based on its development record.

The opposition has relentlessly questioned the financing of the grand projects on commercial rather than concessional terms by China, the whiff of corruption around some of the deals and their impact on national debt. Jubilee’s defence that its transformation agenda requires austerity now before gains roll in, is also persuasive but a right balance between the now and the future should be struck.

Jubilee has sought to cushion the most vulnerable from the impact of this policy through social safety nets for the needy and social sector goodies like free education, maternal health and medical insurance for the elderly.

In its manifesto, Nasa says it would correct this by using the devolved funds to promote enterprise among the youth, women, single mothers, the disabled and orphans. Under it, a revitalised Kenya Industrial Estates would play its role of a business incubator, addressing one of the key missing links to credit access under the devolved funds which now only provide an easy source of money for disbursing agents like banks and ineligible proxies.

Nearly half (48 per cent) of the respondents unhappy with President Kenyatta’s stewardship in the Ipsos survey ranked the economy top of their concerns followed by corruption at 28 per cent. In contrast, 47 per cent of respondents who approved of the president said infrastructure development was the key factor informing their choice followed by the economy at 25 per cent.

With Infotrak, only 3.5 per cent of the respondents said poverty was the reason why they believed the country was not headed right. When all the respondents were asked how much confidence they had in the two leading candidates, 70 per cent indicated they had at least a little confidence in President Kenyatta compared with 64 per cent in Mr Odinga.

6. LAND: How will historical injustices be corrected?

From the moment colonialists set foot in Kenya more than 100 years and their handing over to an independent republic in 1964, land has been entwined in national politics.

7. SECURITY: Is engagement in Somalia compromising internal security?

Terror is now a global problem, several European capitals have been hit -- but attention in Kenya has been whether the country is well prepared to tackle it and forestall negative travel advisories that affect tourism and economic growth.

8. CONSTITUTION: Has devolution lived up to expectations?

Devolution, citizen rights, establishment of independent constitutional commissions and clipping of presidential powers by Parliament were the key planks of the Constitution promulgated in 2010. But it is devolution that has proven an acid test.

9. SOVEREIGNTY: Is The Hague, international community meddlesome?

The election of 2013 brought the role of the international community to the fore.... Propaganda masked reality on the matter but it is not in dispute that ICC influenced the outcome of that election.

10. PUBLIC SERVICES: How free is free education, health?

After a painful dalliance with World Bank policies that introduced cost sharing in education, health and agriculture, Kenya has since 2003 made significant steps towards being a welfare state.

NEXT WEEK: The 10 factors that will determine who wins the elections.

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