Politics
Evaluating Uhuru Kenyatta’s first year
Notwithstanding, the official line on the economy is outright optimism. Kenya’s Bureau of National Statistics is recalculating the country’s GDP, and the results will be out in September. Insiders say that they will show a rise to about $50 billion from its current level of $37 billion.
Diminishing returns
This year the economy is expected to grow by more than 5 percent. “President Kenyatta still has the benefit of the doubt even if the economy didn’t bounce back as expected after he took over. The real concerns are about devolution. We now have 47 back offices where we used to have one. The counties need to see more administrative discipline,” says market analyst Aly-Khan Satchu.
Echoing World Bank concerns about fiscal discipline, Satchu adds: “The failure of the ‘Africa rising’ story is the failure of government to resize itself. We can expect revenues to be up this year because of efficient collection. But this is a climate of diminishing returns. The public is being over-taxed. The government needs to take a scalpel to public expenditures.
No matter how many middle-class Kenyans might agree, that does not explain how the government will finance its expensive retooling of security, and its wide-ranging promises of better quality social services and billion dollars of investments in roads, ports and railways. Unquestionably, Kenya will be key to the rise of East Africa’s regional economy and trade, but in the short term there are plenty of obstacles in its way.
