COMMENTARY : Kibaki’s hands-off style drives economy

Watching Finance minister Amos Kimunya read the Budget speech yesterday, President Mwai Kibaki must have been quietly satisfied that his five-year term is coming to a close with the style of economic management he had pledged to install working as intended.

He might have had reason to look back to his acceptance speech on being declared the Narc presidential candidate in 2002.

During that occasion, Mr Kibaki had referred, almost wistfully, to the style of leadership practised back in the reign of President Jomo Kenyatta.

He was referring both to the ways in which the civil service was run and the economy managed during the time of Mzee Kenyatta, who had ruled the country from independence in 1963 up to his death in 1978.

Indeed, references to that period were an essential feature of Mr Kibaki’s campaigns since he first sought the presidency in 1992, with his pitch always harking a great deal on his successful stint as Finance and Economic Planning minister between 1969 under Mzee Kenyatta on to the period he held the docket under President Moi up to 1981, and also to his educational background as a Makerere and London School of Economics-trained economist.

Another common mantra of the campaigns was taxation and how the money collected could be put to good use instead of disappearing into bottomless pockets.

Up to today, exhortations for people to pay their taxes are a common feature of President Kibaki’s speeches.

Apart from his stint as Finance minister, the President had served as assistant minister for Finance between 1963 and 1965 and as minister for Commerce and Industry between 1965 and 1969.

Thus the President was always a key player in Kenya’s economic management during the early years of unprecedented growth, and is credited, together with Mr Tom Mboya, of crafting the free market policies that catapulted Kenya’s economy way ahead of its neighbours.

With the economy very much on the mend since Mr Kibaki made it to State House on his third attempt at the end of 2002, it is easy to make the case that the credit goes not to the two men who have served the Treasury docket during that period — Mr Kimunya and his predecessor Mr David Mwiraria — but to the policies established which basically emphasised going back to the basics.

Radical policy shifts

For Kibakinomics, if it can be termed so, has never been about radical policy shifts, but the much more conservative plan of simply doings things in the proved and tested ways.

It is about ensuring that the basic rules of bookkeeping are observed and about giving Treasury, and the entire civil service, the freedom and latitude to operate without too much political interference.

This is in stark contrast to President Moi, whose tendency to want a say in every little decision eventually neutered the rest of government as ministers and PSs were perpetually looking over their shoulders and could not make any decision without reference to State House.

Under Moi, also, was promoted the culture of political fixers and wheeler-dealers who, claiming authority from State House, could bully ministers and top civil servants to force decisions and policies that were geared to benefiting private interests. Indeed, under President Kibaki, there has been a great deal of emphasis on civil service reform geared towards achieving efficiency. The reforms have also had the effect of insulating the civil service from political pressure simply by demanding that all officers be responsible for their actions, with little recourse to the ‘‘orders from above’’ that were used to explain away anything during the Moi era.

In harking back to the Kenyatta years, however, questions have always been asked whether President Kibaki was looking backwards to a command economy rather than into the future.

But as it can be seen in the last five or so years, wistful references to the past have not stopped his government from enthusiastically embracing new ideas.

The Treasury, the Ministry of Planning and all other government ministries and departments at the forefront of policy design and implementation are packed with youthful technocrats, many with backgrounds in international financial and development institutions, who have been given free rein to drive key reforms.

Thus, while it may seem that the Kibaki Government is dominated by dinosaurs whose mindset goes back a century, the hands-off approach has ensured that those directly in charge have the freedom to do their work.

But despite everything, not even President Kibaki has been unable to resist the temptation to have decisions made on political considerations.

President Moi, before him, had his infamous Youth Fund and Women’s Fund which amounted to nothing more than pre-election bribery.

President Kibaki has his equivalents too, the difference being that they are funded directly from the Treasury rather than through public collections.

Also, the money is not being dished out freely at political rallies, but through structures that are supposed to ensure it is used for the intended purpose, and that it will be paid back.

The biggest fear as the General Election approaches, however, is whether there will be the temptation to raid the Treasury for campaign funds.

President Kibaki’s past political campaigns have been privately funded. But he was in the opposition then. There are indications now that many in his campaign see no reason to solicit for private funds when they have Treasury at their disposal.

There is evidence that those in high office who promoted continuation of the Anglo Leasing and associated scandals actively argued the need to raise political funds.

The fact that there has been no will to take action on those implicated is an indication that the motivation has not changed.

Publication Date: 6/15/2007

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