2022 presidential race zeroes in on economic models

Already Deputy President William Ruto, ODM boss Raila Odinga and Amani National Congress’s Musalia Mudavadi are squaring it out on who has the best ideas to fix the economy.

‘Uchumi bora’

The DP has marketed the bottom-up economic model, while Mr Odinga promotes rural economies, a compulsory universal health programme and the resurgence of industries. Mr Mudavadi associates himself with ‘Uchumi Bora’ (a better economy).

The second-in-command wants government to set aside Sh30 billion a year to help small and medium-sized enterprises.

He says this is the surest way to spur growth as opposed to the top-down model that seeks to invest at the top in the hope that it will trickle down to the bottom of the economic pyramid.

“I want these people with small businesses because we want to put in place a hustler’s government next year. It will be a government [that] recognises businesses of the common person, a government that will understand that a jobless person should be given priority rather than a person looking for power,” the DP said on Friday when he met traders in Nairobi.

He added: “Small and medium-sized enterprises are at the core of our drive to jump-start Kenya’s economy under our bottom-up model as they sustain millions of livelihoods. This inclusive and bold push will extend financial support and render a conducive investment climate that does not criminalise enterprises.”

Kenya’s debt

The discussions around the economy come at a time when Kenya’s economic growth rate has been dropping from a high of 8.4 in 2010 to 5.4 in 2019.

Kenya’s debt has also risen to Sh7.7 trillion, with revelations that the country borrowed Sh3.2 billion daily between July 2020 and July 2021.

The fact that millions of Kenyans are reeling under the burden of a tough economy that has been worsened by the Covid-19 pandemic gives politicians an opportunity to woo them with promises of making life better, analysts say.

Institute of Economic Affairs Chief Executive Kwame Owino says the Kenyan voter needs to engage and interrogate who best will address the economic challenges.

“Before these politicians come up with whatever economic model, what do they adjudge as the problem? Two, where do they place the Constitution in this? The Constitution is what gives the guide to what can or cannot be done.

“And, if the things they define as the problems resonate with you, then you can listen to what they offer as a solution,” Mr Owino advised in a recent interview.

Part of the big decisions the next government will have to make, Mr Owino said, is what to do about taxes and white elephant projects.

“There are no shortcuts, for any model. What Kenyans are looking for is an opportunity to do business and not compete with government. The other is tax regime; making sure people can keep much of what they make.

Honest living

“As a citizen, ask: Which one of these politicians will unshackle me from huge taxes, allow me to keep most of what I make and let me make an honest living?” said Mr Owino in the interview with Citizen TV.

Mr Odinga wants Kenya to refocus on skills identification for the return of the ‘Made in Kenya’ brand.

He specifically wants formation of a human resources development body that will identify skilled youth, organise domestic skills competitions and send the best to compete globally.

“The end result of this deliberate policy of rural transformation that makes rural life more liveable and migration to cities unnecessary … will be the creation of functional and rich villages where people have money in their pockets and lead dignified and decent rural life in Kenya. It has been done in other countries. I believe it can be done in Kenya,” Mr Odinga said in a two-page document posted on his social media pages last month.

For his part, Mr Musyoka said an economic revolution will only come from a 24-hour economy in the informal sector.

“We work 24 hours. Let us have the first group reporting at 8am and work for 8 hours then another takes over from them who will work throughout the night. This will help us to make our economy, which has deteriorated, thrive,” he explained in an interview on Radio Jambo on Wednesday.

Mr Mudavadi’s Uchumi Bora will focus on agriculture, entrepreneurship, public-private partnership initiatives, youth employment, industrialisation, manufacturing and innovations.

In a wide ranging interview with Radio Maisha Wednesday, the ANC leader said if elected, he will reduce over-reliance on debt and settle the existing loans for to reduce the taxation burden on Kenyans.

Repay debts

He disclosed that the government is currently using around 70 per cent of taxes to repay debts.

“I would love that we have an economy where we do not use such a huge chunk of money to repay our debts. It is a must that we will reorganise government programmes and those which were too ambitious, rearranged so that we get our priorities right,” Mr Mudavadi said.

He added: “We will reduce our value-added-tax from 16 per cent to 12 per cent, hence making sure that Kenyans have money in their pockets.”

Mr Mudavadi said the government should reduce operational costs of industries to encourage investment.

“Currently, most industries use around 40 per cent in energy -—electricity is very expensive in Kenya. If we have to be competitive, we must find a way of reducing energy costs. Reduce operational cost from the current 40 per cent to 20 per cent,” he said.

Prof Egara Kabaji of Masinde Muliro University says the attempt by the presidential contenders to champion economic growth in the 2022 polls is a laudable departure from the past, but worries that in the end, tribal inclination will carry the day.

“If Ruto manages to dismantle the belief that we all have to vote along tribal lines and vote class instead of tribe, then he is on the right path. If he does not manage it then he is in for a rude shock,” Prof Kabaji said.

[email protected]