NAIROBI, DEC 13 – Contradictions and controversies have run rampant around Kenya’s economic state. Both president William Ruto, his deputy Rigathi Gachagua and Treasury cabinet secretary Njuguna Ndung’u have found themselves making contradictory statements. The three of them seemed to be reading from different pages of the same book.
President Ruto has on many occasions showed optimism on Kenya’s economic state on many of his public speeches. The latest being his speech during Jamhuri Day where he said that the country is no longer in the “risk of economic distress”. This poses a question as to whether the country had been at a risk of economic distress without Kenyan’s notice.
In his speech Ruto said the country’s economy is on a “stable footing” and further added that inflation had reduced by from 9.2% to 6.8%, with Kenya being ranked 29th fastest growing economy in the world with a growth rate of 5.4% according to World Bank.
Ruto: “I can now confirm without fear or contradiction that Kenya is safely out of the danger of debt distress and that our economy is on a stable footing.”
From his speech, it’s clear that the country’s economy had been struggling to pay debt which in several occasions his deputy Rigathi Gachagua has pointed out to. In his speech on 7th of December, Gachagua emphasized his frequent statement that they inherited a dilapidated economy from the past regime.
Kenya’s Debt
Gachagua likened Kenya’s economy to a patient in Intensive Care Unit (ICU) and further lauded Ruto’s regime for bringing the economy from ICU to HDU and now Kenya’s economy is in the ward according to him.
The second in command, being a “truthful man” had in many public speeches said the government is struggling. His speech on 7th December pointed out that the government uses “70% of its revenue to pay debt” which leaves little money for development projects.
According to the Treasury and Central Bank of Kenya (CBK), Kenya is owed up to Ksh10 trillion ($68 billion).
Gachagua: “When I spoke here on September 13, 2022, I said that we found empty coffers. I repeat we found empty coffers and that is the truth. No amount of denial will change that fact. We found the Kenyan economy in ICU.”
“The patient called the Kenyan economy was on life-supporting machines. The president as the chief surgeon in the theatre of economic recovery struggled in the first six months and got the patient from ICU to High Dependency Unit (HDU). In the next eight months, the president struggled and got the patient called the Kenyan economy from HDU into the general ward. The patient is showing good signs of recovery.”
Differing development projects to pay debt
Ruto in his Jamhuri Day speech stated that the government had to reduce expenditure and differ some critical development programs to stabilize economy.
Ruto: “We had to cut back significantly on expenditure and to differ implementation of critical development programs to stabilize our economy.”
Treasury CS Njuguna Ndung’u on the other hand seemed to be reading a different script altogether. While appearing before the National Assembly’s Finance and National Planning Committee, Ndung’u said the treasury is facing liquidity problems, and even paying salaries is a challenge.
CS Ndung’u: “We are having a liquidity problem and that is why we cannot come to the rescue as fast as we should but we are working to ensure that before Christmas we will have taken some steps towards addressing the CDF issue.”
Challenges of paying salaries
“At the same time, because those extremes also create a recession we are not getting adequate tax revenue. So, in a sense we are even struggling just to be in the same position. By the way, I can tell you, we are even struggling with salaries. We are clearing salaries with arrears,” Ndung’u added.
The three key men holding critical positions in Kenya Kwanza government seems to be battling to say the truth as well as keeping an optimistic stance in the way the way the economy is fairing. Needless to say many external shocks are much present including the ongoing conflict in Ukraine and Israel which is destabilizing oil prices which the economy is dependent on. And as it appears the state is struggling to pay debt.
