Kenyan Cabinet: A band aid for a bullet wound?

By Greg Mills and James Kibera

Kenya now had a new cabinet. Will that solve the problems that gave rise to the contested election and the subsequent violence?

The actions that need to be taken now to ensure that the crisis is solved are primarily economic. While government has prevaricated over the cabinet, there has been a 100 percent increase in the cost of fresh agricultural produce with no corresponding changes in wages for the lower income groups. This environment is not conducive to socio-economic and political stability in the short-run.

The key challenge for Kenya, like all of Africa, remains to find a way to create jobs and growth, though the rise of Asia and relative lack of African labor competitiveness makes manufacturing-driven export-led growth unrealistic.   Africa core competitiveness of agriculture and mineral extraction is obstructed by developed nation tariff barriers that prefer raw imports and discourage value addition.   The question remains therefore what should be the method and the way to ensure lasting growth and place of competitiveness in the global market place. The question is one that must be continually asked but the expectations of people in Kenya do not give us the luxury to contemplate its answer in full, the new Cabinet must deliver jobs, training and widespread growth to simply survive till 2012.   

So what to do?

The first need is to create a shared vision of both PNU and ODM.   In all the discussions of power distribution, we have seen little to nothing of Kenya leadership speaking of the direction and use of power. Today there are two Kenya’s: One with a progressive vision for the future; the other will little hope of change and limited opportunity. The economic manifestos of the two main political opponents in the 2007 elections brought out the key differences in outlook and vision for Kenya. One viewed economic growth as the solution for Kenya’s ills; the other viewed the distribution of state resources and regional parity as critical elements in the path to prosperity.

We need a vision that encompasses growth and equity, and has a vision that captures the imagination of the country with a clear picture of the future.   Vision 2030 lacks the practical input from private sector business that could make it achievable.   In Vision 2030 tourism is tagged as a major sector of emphasis, for example, it is surprising that such a sensitive and volatile industry can be chosen as the backbone of an economy. In Kenya tourism as well we have three of four very separate segments such as beach, bush and one-of-a-kind safaris none of the analysis in Vision 2030 showed even basic understanding of these segments.

Our first imperative is that the Cabinet must have a economic vision of the future that they all agree to work towards, and this imperative must be practical.  

A second imperative is to broaden the productive base of the country by developing regional infrastructure and taxation.

Since independence, Kenya’s economic progress has been closely linked to the colonial era. The highlands and parts of Rift Valley have been the main drivers of growth. Tourism has also contributed to this growth but the owners of most of the key assets and main beneficiaries in this sector are not always from the regions where activity thrives. Therefore there is a need along with CDF to create a mechanism for aspect of regional taxation of industry but have its use be centrally audited if not initially managed and directed.

Balanced regional infrastructure is a significant constraint to effective productive activity; we rarely value the importance of Nairobi to real estate and commercial activity to the outlying areas.    We need to enhance both the commercial viability of areas other than Nairobi and encourage professional migration and movement amongst the regions.

A third need is to address the conditions in which Kenyans live.

Over four million live in slums. Studies show that Kenya’s slums have some of the worst access to basic amenities – water, electricity, sanitation – in the world. Unlike slums in other parts of the world like New Delhi or Rio de Janeiro or even Dakar where the majority “own” the shelters they live in, most Kenyans living in slums are tenants. Unsurprisingly a great deal of the urban violence was directed at landlords. One means of addressing this is through the extension of property rights thereby making mortgages available to the majority, a hallmark of a modern society.

Kibera that houses over a million people has little if any title, the only basis of establishing property rights.   The requirement is not for us to build housing for the poor but for us to create the conditions that allow a slum dweller to access title, finance and infrastructure to build permanent housing.    Our slum upgrading program in description fails in that they hold the promise of future externally: that some rich donor of government will help people.   The truth no-one will help Kenyan but Kenyans, only the Government can allow the conditions of private ownership and development to thrive.  

A fourth area of action is thus to expedite programmes to build infrastructure and standards for all Kenyans a common thread in addressing the above.   Our present largely colonial infrastructure serves the needs at best of 25 percent of the population we categorize the other as informal sector and jua kali according to Vision 2030.   A Government at worst is formed for the majority, our Government needs to expand both the taxation base, service provision and management of standards to encompass and increasing majority of it population:   have building codes for slums, rural areas, livestock, dam and water management and enforce them strongly and rapidly.  

The Government needs to begin to serve the majority of its people and not only its elite, like the colonial government it preceded.

Strategies need to be developed that generate higher rates of growth in the short-term whilst mopping up large numbers of potentially destabilizing elements within society. In blunt terms, jobs and rapid growth must be a priority.

Vision 2030 has big goals one is hard pressed to understand exactly what we must do to achieve increase of formal jobs of 1.8 million to say 3.6 million in say 3 years.   In order to do this one cannot speak about economic segment such as agriculture that do not exist in business (no one is in agriculture or agri-business) people are in coffee farming, coffee trading, coffee roasting and packaging, coffee distribution and retailing to be precise.   The business categories differ sharply from the structure of Government, we need to carve out the industry understanding and work backwards to say what a 5 percent increase in market share of fresh produce by negotiation tariff concession and reducing logistic should be mean for farmer business case and therefore ability to employ.   The investment of government must be in relationship to anticipated increases I taxation.   Our planning does not have this complete understanding.

Private sector involvement is crucial to competitiveness and sustainability and this is the core of our emphasis.   While private sector is often discussed rarely are they truly harnessed to be productive, because the truth is people who are busy with making money rarely invest the time to explain their industries and businesses.   All too often the representatives that speak to Government are ones that are arguing their corner, speaking about tax relief and ways to individually benefit their industries perhaps not always able to see the best interest of the public good.   The key is being able to take decisive action and see what industries we can be the best in the world at and as a Country take this opportunity of crisis to chose a few and push aggressively forward.

Kenya ’s alternative to not taking bold economic action is much more of the chaos we have seen in the past months since 2007 election. The country’s troubles can only be repaired in full by decisive economic action by the new cabinet. Anything other than decisive economic action will mean the power sharing epitomized by a coalition cabinet is nothing more than a band aid for a bullet wound.

Dr Mills heads the Johannesburg-based Brenthurst Foundation; Kibera is a Kenyan businessman.  

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