Kenya’s political economics

Our country is split down the middle. One half is ecstatic as the other is walking on the borders of depression. Regardless of what the Government does, there is no way a house divided will stand against anything. The emotional cost of our elections is so exorbitant; I do not think we can afford it.

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BY KENYATTA OTIENO

Trade, or economics predates organized politics. Kenyans are feeding a monster, a white elephant in the name of politics and resultant leaders. Our political economy does not make any sense. Even before the 12th parliament is sworn in, the elected members are already agitating for a pay rise. The Salaries and Remuneration Commission (SRC) had played a poker by setting new salary guidelines for members of Parliament at the tail end of last Parliament.

I like some people in my circles that tell me stuff as they are. I bumped into Paul in town and found myself spending about half an hour of my time talking to him. As usual with any social discussion in Kenya around June this year, it had to boil down to politics. Paul told me how as a Kikuyu from Kiambu he has referred many of his friends to the efficient and affordable Luo mechanics who operate from his neighbourhood. His displeasure was that at that time he was not happy with their behavior in the buildup to the General Election.

In the end, we came to the understanding that as much as the political enmity between the Kikuyu and Luos is big in Kenya, no sane upward mobile Luo in Nairobi can afford to hate on Kikuyus. I also added that there is no serious Kikuyu investor who can do without the Luo intellect, hard work and knack for a good job. Somewhere in the economics hub, Luos and Kikuyus need each other but politics tell a different story.

The Corporate Kenya does not make sense. Kenya Revenue Authority collects about Sh1.36 trillion out of which Sh700 billion goes to service debts. Another Sh300 billion goes to counties so the Government is left with about Sh350 billion for corruption and what remains goes to development. Then leaders we have elected through a very expensive exercise still demand for a pay rise.

Treasury allocated about Sh43 billion to IEBC for elections. This amount could have been exhausted in the just concluded election yet IEBC is yet to respond to many petitions that election users are going to file. Kenya spent about $25 (Sh2500) per voter in the just concluded elections while Rwanda spent $1 and Ghana about $12 per voter in their last elections. At a glance, we are paying more for our elections even without adding the amounts candidates spend in the campaigns.

Let me leave the figures for now and quantify the emotions involved in our elections. We invest too much emotional energy in our politics. In the end our country is split down the middle. One half is ecstatic as the other is walking on the borders of depression.

Regardless of what the government does, there is no way a house divided will stand against anything. Kenyans are now discussing secession instead of the pending Presidential Petition at the Supreme Court. The emotional cost of our elections is so exorbitant; I do not think we can afford it.

Kenya Revenue Authority recently released an abridged version of tax collected in the 2016-17 financial year. They collected Sh1.36 trillion against Sh1.4 trillion projection. This is what KRA got from 5.6 million registered voters, which comprises of individuals and corporates. Unofficial reports say that only 2.5 million people filed tax returns. Look at it that only about 2 million people assuming 0.5 million voters are corporate entities out of 19.5 million voters pay taxes.

In a discussion with a KRA employee, I learned that tax cannot be imposed arbitrarily but must be subject to an income. So there is little KRA can do to the majority of Kenyans who make good money but do not declare it. Here is a case where the economy is so informal nothing major can be tracked. Nevertheless, if only 10% of the population is able to pay tax, then something is very wrong with the economy.

To those of us who do not have a salary, our income is subject to direct and indirect forces on the economy. Since the party nominations in April, the economy has been in limbo, it went to a standstill one week to the elections. The excuse I kept getting was that- let’s talk after the elections. Currently as much as people want to go back to normal, the presidential petition and the politics around it is a load the economy cannot run with on its back.

As things go, it looks like the country will return to some semblance of normalcy in January 2018. That is like a whole year of economic limbo. There is no investor who will not factor in political stability whenever he wants to put his money into a venture. Our politics is not doing our economy any justice. It is not sustainable.

If economic interests predate organized politics then national politics should not take precedence over our economy. The 1979 siege in the US Embassy in Tehran in Iran, which led to the Iran-Contra scandal, is a case study in economy over politics. The US was openly supporting Iraq but secretly selling weapons to Iran. By the time Iraq invaded Iran in September 1980 the American hostages were still being held at the US Embassy in Tehran.

This led Iran to begin negotiations with USA. The hostages were released in January 1981 after USA agreed to sell arms to Tehran while the US Senate openly approved support to Iraq. Politically, America was supposed to be hard on Tehran but wisdom dictated that they secure release of the hostages. In International Political Economy that is the scenario that plays often but in the end USA got its citizens back and money from Iran. It is foolish to let politics out gun economic interests.

This is why as much as there are people with deep-rooted selfish interests in Kenya’s political scene some courage is needed. At the current state where 2022 alignments are being fronted even before the President Elect is sworn in is not good for the economy. If we must run with the devil as we fund the witch to fight him like US did in the Middle East in the early eighties then we must. Our political economy is not making sense.