Political rhetoric hurting economy

 

In Summary

• On Wednesday, the United Nations Conference on Trade and Development (UNCTAD) Secretary-General Dr Mukhisa Kituyi urged politicians to stop bickering and instead focus on development.
• The World Bank had in last year’s projections noted that Kenya could grow to regain its 2017 growth momentum of 7 per cent but, with this year’s downgrade to just over 5 per cent, that now looks increasingly difficult.

By EDITORIAL
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Kenya looks to have entered what has come to be known as the 5th year curse in Africa – a period when little economic activity takes place whereas political noise rises in the 12 months to a general election.
The tragedy for Kenya is that this is happening 18 months away from the next polls and at a time when the growth prospects for the country are looking dim.
The heightened political activity has not been helped by revelations of massive looting of state resources by public officers, some of whom seem to enjoy political patronage from high offices. The effect of this negativity is already being felt by the economy with analysts projecting slower growth rate than the country’s potential.
On Wednesday, the United Nations Conference on Trade and Development Secretary-General Dr Mukhisa Kituyi urged politicians to stop bickering and instead focus on development. Dr Kituyi noted that Kenya had potential to develop if leaders toned down political rhetoric.
The World Bank had in last year’s projections noted that Kenya could grow to regain its 2017 growth momentum of 7 per cent but, with this year’s downgrade to just over 5 per cent, that now looks increasingly difficult.
The government also seems to have slowed down or abandoned big infrastructural projects which would have been a great catalyst to regaining higher wealth creation pace. Construction of the Standard Gauge Railway, which is the only big project going on, is hurting the economy more than helping with its huge import bill causing chaos in the forex market.
The private sector is also faced with high cost of credit as government increases borrowing to finance its operations on dwindling tax revenue, making it difficult to finance production.
Last week’s revelation that the country could have lost billions of shillings through corruption at the ministry of Devolution doesn’t help this cause. And neither is the unsubstantiated claim that money borrowed from the international market may have ended up in non-state projects.
In all these developments the person who will continue to suffer is the average Kenyan citizen who now faces a higher tax burden with little to show in service.
It’s not too late to remedy the situation by turning the negative energy into a growth momentum that will ensure that the country’s key sectors flourish even as we choose leaders in next year’s elections