Although relatively better off than its neighbours, Kenya remains a struggling economy dominated by foreign-owned tourism, agriculture, the services industries and a small manufacturing sector stunted by huge imports and counterfeits. Endemic corruption, increased integration into the global capitalist economy and neoliberal policies that favour a small fabulously rich class have conspired to hold the majority of citizens tight in the jaws of poverty.
The numbers are in, but who cares? According to the Kenya National Bureau of Statistics (KNBS), a government agency, East Africa’s largest economy grew by 5.8 per cent last year, a slight rise from 5.7 per cent the previous year. But only Planning Minister Mwangi Kiunjuri was excited when he presided over the release of the figures last week. “This growth was achieved through the government’s commitment in creating an enabling environment for doing business in key areas”, he crowed.
Nobody else saw anything to rejoice about. Pro-government media like Nation’s attempt to splash the news fell flat. The country is so consumed by the rather violent and shambolic party nominations ahead of general elections in August that no one seems to care about government stats. Moreover, it is the norm in Kenya that any matter regardless of its importance would only attract considerable public attention when some big politician decides to go to town on it. But more to the point, there aren’t many people in Kenya who can tell you what a GDP growth of 5.8 per cent did for them personally or their relatives and friends last year. Several opinion polls in recent years have consistently indicated that the number one concern for Kenyans is the very high cost of living.
The 5.8 growth figure isn’t a big deal in another important respect. According to the government’s blueprint, Vision 2030, the economy should be growing at a steady average of 10 per cent to transform Kenya into a middle-income industrializing nation. Now, the highest annual GDP growth rate witnessed in Kenya for more than thirty years is 7.1 per cent in 2007. With only 13 years to go, Vision 30 is a mirage. And the details of the latest survey reveal the utter emptiness of the prosperity rhetoric the Uhuru Kenyatta administration feeds the masses.
A key highlight of the survey is creation of jobs. In 2016, the economy reportedly generated over 856,000 new jobs. Against the Kenyatta regime’s pledge of a million jobs a year, this figure sounds like quite an achievement to shout about from the rooftops – until you examine the details. More than 700,000 of those “new jobs” were in the informal sector, the survey says. That means over 90 per cent of the “jobs” were not jobs at all. Only about 85,000 were real new jobs. Wage employment stands at about 2.5 million out of the country’s population of about 50 million.
What the government statistician calls “new jobs” comprise, at best, fitful micro-enterprises scattered across the country and, at worst, all those desperate survival initiatives impoverished Kenyans venture into to get by: running mobile phone credit stalls, being hired as a motorcycle taxi rider, hawking, distributing leaflets on the streets at a fee, burning charcoal, roadside maize roasting, vending ripe bananas and porridge at construction sites, keeping a corner vegetable stall, piecework at sweatshops, etc.
As a matter of fact, there have been numerous reports of closure of businesses and staff layoffs in Kenya over the past year. In the week the economic survey was released, the region’s biggest bank KCB announced a plan to layoff an unknown number of workers. At least six other banks have done the same.
This week, a new survey of Kenya’s CEOs paints a picture that should get everyone worried. Asked whether they expected the total number of their company’s employees to increase, remain the same or decrease in the next six months, 52 per cent of the CEOs said the numbers will remain the same, 18 per cent said the numbers will drop and 30 per cent said the numbers will increase.
The government’s Economic Survey came out just weeks after Uhuru Kenyatta declared famine a national disaster and appealed for local and international aid. Half of the country (23 counties) needs food relief. This month protesters in Nairobi and other towns have been calling for government intervention to reduce the prize of maize flour, a national staple. The prices of most basic commodities have kept rising.
Upon ascending to office four years ago, the Kenyatta government promised “a revolution in Kenya” featuring among other goodies, food and clean water on every Kenyan table, quality education for every child, creation of wealth and quality and affordable healthcare for everyone. These things were premised on full implementation of the Second Medium Term Plan of Vision 2030. The Jubilee government should have, between 2013 and 2017, delivered accelerated and inclusive economic growth, higher living standards, better education and healthcare, increased job creation especially for the youth, commercialized agriculture providing higher rural incomes and affordable food, improved the manufacturing sector and diversified exports.
Delivering his last State of the Nation Address last month, Uhuru Kenyatta said all these things have been achieved. He described his first term in office as “an extraordinary journey of transformation, growth and the deepening of democracy” in Kenya. Never mind that officially over 4 million Kenyans are going to bed hungry. A three-month strike by doctors over failure by the government to honour a collective bargaining agreement brought public health service to a halt countrywide. Public universities were closed down for the same reason. There have been numerous other strikes by workers demanding better pay to cushion them from the pressures of a declining economy. The other millions of citizens who are not in formal employment have been enduring their poverty quietly - or perhaps flocking the many "miracle" churches mushrooming around the country praying for a breakthrough.
The World Bank says in a new report that Kenya suffers from a serious low-cost housing crisis. The country needs 200,000 new houses a year, but only manages a quarter of that. As a result over 60 per cent of Kenyans in urban areas live in slums. Are these the same people whose lives have reportedly undergone extraordinary transformation in the past four years?
An exasperated economist David Ndii, commenting on Uhuru’s proclaimed achievements, stated: “President Kenyatta does not give a damn whether what he says is true or not. Whether we prove that he is lying or not is of no consequence.”
Improved manufacturing and diversified exports that are meant to drive Vision 2030 are nowhere to be seen. According to the Economic Survey, manufacturing grew from 3.5 to 3.6 per cent last year. The sector employs about 300, 000 people. A flood of cheap imports and counterfeits especially from China has crippled local manufacturing. The value of Kenya’s exports is only 40 per cent of what it imports, making the country largely a market for foreign goods.
“Tea, horticulture, articles of apparel and clothing accessories, and coffee were the leading export earners accounting for 56.7 per cent of the total domestic exports during the review period,” the survey shows. On the other hand the country’s top imports are petroleum products, industrial machinery, aircraft and associated equipment, motor vehicles and iron and steel. This state of affairs has remained the same since the colonial days.
The key sectors of agriculture, fishing and forestry went down last year from 5.5 to 4.0 per cent, with fishing declining by 16 per cent. These sectors are starved of government investment and appropriate policy support to yield their full potential. Even the construction boom that had been witnessed in recent years is now on decline, except for government mega-projects. Growth in the sector fell from 13.9 to 9.2 per cent.
The much touted tourism industry grew by 17.8 per cent. But this is a fickle sector which, as has been witnessed numerous times, could be thrown into disarray by a single travel advisory issued by any of Kenya’s neocolonial masters. In addition, the major beneficiaries are foreign operators and their local allies.
Whereas the productive sectors of the economy are generally on decline, and are sometimes targeted for budget cutbacks, the government has spared no resources in security expansion – this is where some of the worst corruption scandals occur under the cover of “national security”. Kenya is the leading military spender in East Africa and the 8th largest in Africa, with a budget of $ 933 million, according to a global report released this week. While the military budget rose by 10. 5 per cent last year, the government cut the allocation for agriculture, the backbone of the economy, by about KES 5 billion.
Kenya's total budget for agriculture stands at around 5 per cent, less than the 10 per cent agreed by African heads of state in the Maputo Declaration of 2003. In last year’s budget, for example, agriculture, rural and urban development received a combined total of KES 69.6 billion, while defence, public order and safety was allocated KES 265 billion – more than three times.
A major feature of the Uhuru Kenyatta regime is the steep rise in public debt to put up showy mega-projects that mesmerize the citizens but which are of little consequence in improving their lives. Infrastructural projects are supposed to boost production, but that is not happening as can be seen from available figures. Mega-projects are major conduits of corruption. According to the Central Bank of Kenya, national debt has doubled during the Jubilee government’s first term in office, rising by 98.94 percent to stand at 54.6 per cent of the GDP. According to one report every Kenyan has owes KES 59,000.
From day one, the Jubilee government has been dogged by frequent reports of grand corruption involving billions of shillings that disappear into the pockets of powerful individuals and their networks. About 70 per cent of the respondents in the CEOs survey published this week cite corruption as the factor with the highest impact on their business. The government’s Ethics and Anti-Corruption Commission says up to a third of the national budget is stolen. Some of the notorious scandals reported during the Jubilee administration include the hustler’s jet, Eurobond, laptops tendering, Standard Gauge Railway tendering, National Youth Service scam, Afya House scandal and the Rio Olympics scam.
Despite the Uhuru Kenyatta government’s glitzy PR, Kenya, though relatively better off than its neighbours in East Africa, remains a poor economy dominated by foreign-owned tourism, agriculture, the services industries and a struggling manufacturing sector stunted by huge imports and counterfeits. Endemic corruption, increased integration into the global capitalist economy and the pursuit of neoliberal policies that favour a small fabulously rich class have conspired to hold the majority of citizens tight in the jaws of poverty.
* Henry Makori is an editor with Pambazuka News.
* THE VIEWS OF THE ABOVE ARTICLE ARE THOSE OF THE AUTHOR AND DO NOT NECESSARILY REFLECT THE VIEWS OF THE PAMBAZUKA NEWS EDITORIAL TEAM
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