Here is the proper guide to current economic affairs

In one of his earlier and most prominent works, famed British economist John Maynard Keynes wrestled with the question of the right amount of government intervention into the free market, a question which is still unsettled, dividing economists along clear ideological lines.

Liberal thinkers from the Austrian economic school frowned upon any kind of government intervention, and believed that a free market always finds its perfect equilibrium, optimised for all, even if this takes some time. They were convinced that the “invisible hand of the market” would order the market “in the long run”.

Yet a second school, led by Mr Keynes criticised this view heavily. In his 1923 “Tract on Monetary Reform”, Keynes memorably answered that “this long run is a misleading guide to current affairs. In the long run we are all dead”.

In this approach, we cannot be complacent and wait for economic affairs to sort themselves out on their own. The “invisible hand” needs to be guided in order to assure the greatest prosperity for the greatest number of citizens, while all the same not infringing on their rights and liberties. It is one of the government’s core responsibilities to put in place policies that steer this course and improve the economy as a whole. Inaction on the economic front would be a terrible betrayal of our government’s oath of office, which includes the pledge to “truly and diligently serve the people and the Republic of Kenya”.

Whatever the criticisms, no one can rightly accuse President Uhuru Kenyatta of inaction. It seems that, especially in his second term, freed from the burden of an eventual re-election campaign, he is driven by an incredible force and working tirelessly for a better future for Kenya. The amount of initiatives and reforms he is leading is mind boggling.

This of course is part of a long term strategy whose first building blocks were laid a long time ago. We should remember that the whole rationale behind the Big Four, announced already back in 2017, is to turn Kenya into a middle-income economy by 2030. The four pillars of that national plan are, each in its own way, a perfect example of how the government can and should guide the “invisible hand” of the market.

Incentivising manufacturing, ensuring national health-care coverage, providing affordable housing and supporting local farmers are all important issues which an untamed free market would not provide for. Yet, these are crucial areas in order to improve our national economy, and more generally and maybe also more importantly, our general standard of living.

Yet, it can be hard to track the macro-economic strides forward. A multitude of factors influence the economy, and it is hard to single out a single programme responsible for general improvement, or alternatively for the hardships many still feel.

But what we can do is to take a step back and look at the bigger picture. In this regard we can learn a lot from the national and international statistics and indices, which are published regularly. As it turns out, just recently the Central Bank of Kenya (CBK) announced its forecast for the coming year, an important indicator for the health of our national economy.

The numbers presented by CBK Governor Patrick Njoroge were truly remarkable. His research concluded that the Kenyan economy, as measured by the Gross Domestic Product, should grow by at least 6.2 per cent – and even this high number is only a “benign baseline”, meaning that in the end, it could be considerably higher!

This translates into an improvement of 0.5 percentage points on the previous year alone. In his comments, the governor underlined the importance of proper implementation of economic reforms and initiatives for the further growth of the GDP – so the government’s job is not yet done. We must keep pressing forward.

From an international point of view, the economic future seems wary. Nobody knows if the United States of America will continue their trade war with the Chinese, and how this will affect economies around the globe. President Uhuru’s actions to strengthen our local economy, production, and manufacturing, are thus the only safe way towards a more prosperous future.

President Kenyatta, for one, is not waiting for the long run to take care of the country and its citizens. Instead, he is improving the situation day by day.