Monday, 11 June 2012

The Rise and Inevitable Fall of Njeru Githae

I must admit, I am not easy to impress but Robison Njeru Githae, the minister for finance has pulled off that extraordinary feat; he has won my admiration! Unlike his predecessors, the minister is actually a dynamic and forward-looking man. Personally, I did not know much about the ill-famed man whose bizarre gastronomic proposal on how Kenya should deal with the problem of food shortage became a rich source of biting political satire. Given what was clearly a lack of judgement on his part through his ill-timed and deeply repulsive culinary proposal, I did not know what to make of his appointment to the crucial docket.

Be that as it may, the highly imaginative finance minister is a man with a mission and his forward-looking nature has come in handy in his current assignment.
It is not lost to economic observers that the minister finance is genuinely and deeply concerned about Kenya's debilitating trade deficit. According to the minister, Kenya imports goods and services that it should actually be exporting and that fact appears to trouble him a lot and he appears determined to address it. Again, not too long ago, the minister lamented that the vast majority of Kenyans do not have bank accounts and actually proposed that all Kenyans should own and operate a bank account never mind that financial policies that disincentivize saving and the growth of banking, financial illiteracy, and poverty are the root causes of the problem that should concern the minister the more.
As Kenya prepares to elect the next government, voters need to realize that the major election issues in the forthcoming general election are first and foremost devolution and the economy is second. There is no doubt that Kenyan economy has great potential for growth and bad governance is its greatest obstacle. The 2003-2007 NARC government headed by President Kibaki was able to turn around the economy mainly due to improved governance. The overarching theme of the highly successful Economic and Recovery Strategy for Wealth and Employment Creation (ERS) that was implemented by the NARC government was good governance which brought improved efficiency and that in itself was able to turn the economy around and setting it on the path of growth and prosperity.

To be sure, it is impossible to get the economy right if the politics is wrong and that is why the issue of devolution and the full implementation of the constitution is the foremost election issue in the forthcoming general election. It is only upon the sure foundation of good governance that any nation can build a strong economy that will stand the test of time. In order to build a strong economy, we need to put in place proper economic policies that will facilitate the transformation of our economy. What is needed however, is not just sound economic policies, we also need innovative economic policies. It for this reason that we need a minister for finance that is of Mr. Githae’s particular talent. The man is a visionary, has initiative, and most of all, he has a real knack for policy ingenuity which makes him the right man at the right place albeit he has been appointed to office much too late in the day.

Be that as it may, the minister comes across as a man who would be receptive to rather obnoxious economic facts such as whereas agriculture is an important sector and has been the backbone of the economy since time immemorial, Kenya cannot become rich in the manner we aspire to be in Vision 2030 by remaining in agriculture. The minister would also give credence to the argument that it might be a bit too late for Kenya to develop heavy manufacturing industries such as the automobile and as such perhaps Kenya could a lot better by concentrating on light industries. The minister would also give credence to the argument that the science and knowledge base in Kenya is too small to support a shift into a knowledge-based economy producing technologically sophisticated capital intensive goods. What is known for sure is that Kenya’s economy requires structural transformation and that transformation requires visionary leaders with the boldness and creativity that are characteristic of Mr. Githae.

It is a fact, economic development involves fundamental structural changes in the way production and society is organized and the failure to achieve sustained economic growth is as much a political problem and social phenomenon as it is economic. The truth is that while many people’s positions are improved by economic development, a tiny wealthy minority favoured by birth, education, urban benefits, and income will be hardest hit by a major growth effort since their success is entrenched in the status quo. Economic development therefore requires a government that is capable of directing a major growth effort and the way society is organized because the decision to pursue economic development involves hard choices.

Assuming that Mr. Githae has a clear understanding of how fiscal policies impact on economic development and he is able to craft pro-active fiscal policies to support the economic growth that is needed to address his legitimate concerns, then Mr. Githae is in for a rude awakening because his bosom buddies are the greatest beneficiaries of the entrenched regime and the defenders-in-chief of the status quo in Kenya. Personally, I am extremely doubtful he can defy them much less prevail over them. For now however, he still has what I believe is my fleeting admiration.

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