Even before he formally took office, President William Ruto had started signalling his priorities, starting with reducing the cost of living, but also acknowledging stark realities that there would be no easy fixes.
He said new farm gate prices for maize and wheat will be announced as soon as he takes office, as well as consumer prices for maize flour. If that will translate to higher producer prices for the basic grains and lower retail prices for milled flour, that will be indicative of the familiar populist measures that often don’t make economic sense, but force the government to dig deeper into already depleted coffers in the form of subsidies.
Same goes for proposals to reduce fertiliser prices, which usually involves short-term fixes in subsidies that cannot be sustainable in the long term.
The President also indicated, however, that he understands the economic realities.
Ruto reverts cargo clearance back to Mombasa Port
During campaigns he pledged to speedily tackle the debt crisis, but on Sunday conceded that, while the only way to get out of what he called a “deep economic hole” was through reduced borrowing, Kenya will continue to accumulate more debts in the short term to meet her economic obligations. That was the advice he got from experts. “When you find yourself in a hole, the logical thing is to stop digging so I asked them whether we could stop. They told me we have to continue digging but I assure Kenyans that we will get out of it”.
The speech at Kasarani yesterday maintained commitment to the familiar campaign promises, but also acknowledged realities that there is no bottomless kitty to draw from. On the cost of living, the President said the cost of fuel subsidies, which have gobbled up Sh144 billion so far, are projected to rise to Sh280 billion if maintained to the end of the financial year next June.
He however remained silent on if or when they would be scrapped. This is a matter that will hit soon after the monthly review of petroleum pump prices at a time when oil marketers are already threatening to disrupt supplies over massive bills the government has not paid.
On food prices, the President said that, instead of subsidies, the government will instead shift to empowering producers. He announced a focus of making farm inputs, fertiliser and seeds, available and affordable. Starting next week, he said, 1.4 million bags of fertiliser will be available for sale at Sh3,000 per 50 kilo bag, down from the prevailing Sh6,500.
What the President did not mention, however, is whether the discounted prices are the results of new subsidies or some novel sourcing and pricing mechanism of an imported commodity.
President Ruto's inaugural address
The President also pledged immediate action on one of his key campaign pledges — financial autonomy for the National Police Service — so that the Inspector-General becomes the accounting officer instead of a bureaucrat under the Office of the President.
This, he said, is what will end the “political weaponisation of the criminal justice system”. On the surface, it might look like noble and far-reaching reform giving the police service independence so that it no longer used as a political tool as witnessed so often under the outgoing regime.
In actual implementation, it remains to be seen whether it will be a self-serving measure of direct benefit to President Ruto, Deputy President Rigathi Gachagua , and so many other key figures in the Kenya Kwanza Alliance brigade under active investigation or prosecutions for corruption and other crimes.
End of fuel, Unga subsidies
The President in his speech went back to the campaign rhetoric that allowed dozens of politicians facing integrity issues to shelter behind the narrative that they were being politically targeted. Mr Gachagua went back to that narrative at considerable length, delivering in a rambling, disjointed speech that recalled the angry and bitter rhetoric of the campaign platform. It was a performance that many commentators felt spoiled the mood of a festive occasion before a large number of foreign dignitaries.
Another campaign promise President Ruto intends to keep is in the order that clearing of goods and other operational issues to revert to the port of Mombasa. That he intends to make Mombasa his first port of call after assuming office indicates the importance he accords the issue.
During the campaigns, Dr Ruto agreed with an issue pushed by Mombasa politicians, notably Nyali MP Mohammed Ali, that thousands of jobs had been lost after the coast when the standard gauge railway (SGR) train service took over haulage of goods from trucking companies, while warehouses and container freight services lost out to dry ports in Nairobi and Naivasha .
The compulsory use of SGR instead of trucks is one easy one for Dr Ruto reverse. A trickier one might be the promise to close the inland container depots and revert all such services to Mombasa. The fact is that the warehouse and container storage yards in and around the port thrived because of inbuilt cargo clearing system, ranging for offloading goods from shops, verification and inspection, payment of customs duties and discharge.
Once the process was streamlined and turnaround times rapidly improved so that goods left the port in just a few days instead of two to three weeks, it did mean that warehouses, container storage yards, trucking and associated businesses suffered.
Satisfying the pleas of local merchants and politicians might mean the president reversing great progress of the last few years and reintroducing the inefficiencies that allowed some of their businesses to thrive.
