Kenyans should adopt cautious optimism about 2020 prospects

Opinion is split as to whether the prospects for 2020 are good, bad or somewhere in between. I am cautiously optimistic for 2020.

Over the past couple of years, there has been much scratching of proverbial heads as to why the post-election period did not result in much more economic take-off and commercial activity than it did.

It did not for a variety of reasons, among them adverse weather conditions and continued, even escalated, corruption and outright looting. 

The long-awaited ongoing purge on graft often disrupted mainstream economic activity, especially last year. For example, the investigations and arrests in the Customs Department slowed the passage of imports, and even exports, pulling the handbrake on the wheels of commerce. Another handbrake was the interest rate caps, which, in turn, starved many, SMEs in particular, of much-needed credit.

So, why the optimism? First, we have had more than adequate rainfall in much of the country which has replenished water tables and spurred agricultural activity. Since rain-fed agriculture is a key player in our economy, it has spurred economic activity and should result in the checking of inflation in the coming months.

Secondly, there is reasonable harmony in the country. This is critical and should never be underestimated or assumed. Disharmony and social conflict result in negative activities, which hold back investment and other productive activity.

Third is the repeal of the 2016 interest rate caps. Ironically, they became an impediment to the economy and had actually resulted in a downturn in credit availability, especially for SMEs. Credit provides the grease and oil to the wheels of commerce; so, such a stricture resulted in a slowdown to the latter. Lending and credit availability will slowly increase this year and in turn so will economic activity.

This will be in conjunction with other basic drivers of the economy, which are relatively positive. Tourism is having a very good high season with handsome earnings and generous foreign exchange inflows. Horticulture continues to perform strongly and the heavy rains have strengthened the other major export — tea.

Diaspora remittances, particularly over the holidays, were plentiful and continued their overall upward trend.

Now to the caution — and it is a big one. Corruption and looting deny Kenya three per cent of economic growth every year, making take-off elusive. The tentacles of graft are extremely pervasive and far-reaching and should not be viewed in economic terms per se; they gnaw away at the social fabric and can collapse it. Most Kenyans would be having a much higher standard of living had corruption been, at least, contained.

Let us take an unvarnished look at the progress. In the past year, there has been a more assertive political will from President Uhuru Kenyatta to at least contain the disease. The lynchpin to this was a more proactive investigative and prosecutorial approach. The appointment of Kinoti and Haji and a change of guard at the Attorney-General’s Chambers heightened expectations.

But that is only the start of an intricate process with the aim of conviction. Assembling enough evidence and arguing a convincing case must follow — amid the slow and cumbersome judicial process.

Two things must happen soon. First, the Judiciary must continue to increase its capacity so as to handle and dispense with the multitude of cases thrown at it. Secondly the capacity of both the DPP and DCI and their departments must continue to have their capacity augmented.

Most Kenyans will only be convinced that the graft war is genuine and succeeding when they see the doors of the green prison trucks being closed on convicted ‘big fish’ as they are carted off to serve jail terms. If that happens, the lid on corruption will have been firmly placed and containment will go from strength to strength.