There is hope in the horizon! For those without sight of the most recent consumer index as released by the Kenya National Bureau of Statistics, this statement may sound odd, particularly considering that the report for the first quarter of 2024 indicates that the economy only expanded by 5 percent, compared to a growth of 5.5 percent in the corresponding quarter of 2023.
This slightly reduced expansion as evident in the start of the first quarter raised some concerns, particularly with the increased unrest, more commonly perceived to have been largely instigated by the Gen Z’s.
However, the resolve by President William Ruto to embrace a more inclusive governance approach, even in the face of a stretched resilience among the citizenry seems to be planting some good seeds.
Recent data indicates that Kenya is on the right trajectory as far as economic recovery is concerned.
The Consumer Price Index (CPI) for September 2024 has significantly eased, with the year-on-year inflation rate dropping to 3.6 percent! It stood at 6.8 percent in September 2023 and 9.2 percent in September 2022.
However, it is important to note that this economic reality points to the need to continue with a tight macroeconomic stance in the short run, while charting a path to inclusive, productivity-led economic growth in the long run. This proposed path is in line with the nation's Medium-Term Revenue Strategy [MTRS] that will strengthen the tax revenue mobilisation efforts.
The National Treasury is taking deliberate steps to drive this growth, through a partnership with key stakeholders in the capital market space such as the Nairobi Securities Exchange, Kenya Bankers Association KBA, Capital Markets Authority CMA and Kenya Association of Stockbrokers and Investment Banks.
This partnership aims, among others, to improve the enabling policy and tax environment that will attract services. Anticipated boosters to the economic agenda include a consultatively developed Infrastructure Investment Funds Trust Bill in line with Articles 206 (2) (a) and 207 (2) (a) of the Constitution.
Additionally, through such partnerships, the National Treasury aims to step up the liquidation of the public sector pending bills through specific action by the Cabinet Secretary National Treasury and Economic Planning in line with section 24 (4) of the Public Finance Management Act. This will stimulate the economy via working capital injection into the affected businesses.
In the course of my first 50 workdays in office, in line with the promises I made during my vetting before Parliament, I have taken deliberate steps to commence the journey of having a more impactful Treasury.
The goodwill Kenyans, and more particularly the main market actors were willing to accord the administration as it attempted to improve on governance has been channeled to more vibrant engagement.
It is of course not surprising that upon commencement of my tour of duty, the meetings with the Permanent Secretaries at the ministry and technical teams behind them, opened my eyes to what was already in the works and sharpened my focus to what I needed to tweak so that these efforts can visibly and better impact the lives of Kenyans. This information was swiftly relayed to bolster some trust.
The President of Kenya has an agenda to make Kenyans’ very obvious hard-working spirit realise more gains. I have a task ahead, and the work has commenced. Noteworthy is the fact that loan borrowing at high interest rates has already seen a decline.
This will encourage businesses to borrow funds and invest in expansion. Expansion means purchase and job creation which leads to hiring and the resultant effect is the revival of a vibrant economy.
However, it is clear that even with the lower interest rates, the return on different investments and the social costs of such investments must be taken into account.
This is why the need for dispassionate discourse around PPP (Public-Private Partnerships) must be encouraged. Kenya commenced this discussion several years back and this resulted in the law (The Public Private Partnerships Act, 2021) that we now have, which is still new and detailed discourse around its unpacking is crucial.
Additionally, opaqueness must be diluted even at the risk of potential wrestle with the often quoted cartels who seem to dominate most aspects of public life. However, in partnership it is my belief that we can move Kenya’s economy forward.
Hon CPA John Mbadi Ng’ongo, EGH, Cabinet Secretary
