The cost of political expediency in Kenya’s economic governance

Last week, President William Ruto launched the Fourth Medium Term Plan (MTP IV), covering the period 2023-2027.

This marks the final five-year plan of the Kenya Vision 2030, an ambitious blueprint that promised to propel the nation into middle-income status and ensure a high quality of life for all Kenyans.

In retrospect and as the deadline approaches, it has become increasingly evident that achieving the lofty goals of Vision 2030 is akin to chasing a mirage. Kenya stands at a critical period where the management of its economy demands meticulous planning, sound economic policies and decision-making.

However, the country's reliance on politicians, who are inherently driven by short-term populist ideologies, has resulted in detrimental economic consequences.

Relying on politicians to make critical economic decisions without genuine consultation with experts in the field is akin to entrusting a pilot's seat to someone who has never flown a plane.

While the Vision 2030 document outlines a comprehensive roadmap for economic growth, social development, and political stability, implementation has fallen far short of expectations. Many of the flagship projects remain stalled or incomplete, plagued by red tape, corruption, and insufficient funding.

At the heart of Kenya's economic governance lie institutions that should play a pivotal role in shaping the country's economic landscape, from monetary policy formulation to revenue collection and market regulation.

However, their ability to fulfil their mandates is often compromised by political interference and manipulation.

Political meddling not only undermines the credibility of these institutions but also erodes public confidence in their ability to act impartially and in the best interests of the nation.

When decision-making is swayed by political considerations rather than economic fundamentals, the result is often suboptimal policies that fail to address the country's economic challenges effectively.

Crafting effective fiscal policies, managing monetary systems, and understanding global market dynamics demand specialised knowledge and experience. When officials owe their positions to political patronage rather than merit, they may feel obligated to prioritise the interests of their benefactors over the public good.

In the USA, while the United States' Federal Reserve System is technically independent of political control, it illustrates the importance of insulating monetary policy from short-term political pressures.

The Federal Reserve's Board of Governors, operates with a mandate to promote maximum employment, stable prices, and moderate long-term interest rates. By shielding monetary policy decisions from political interference, the Federal Reserve maintains credibility and fosters confidence in the stability of the U.S. economy.

To achieve the aspirations of the vison 2030, Kenya must undertake a series of reforms aimed at enhancing the autonomy and accountability of key economic institutions. This includes enshrining their independence in law, strengthening governance structures to insulate them from political interference, and enhancing transparency and accountability mechanisms to ensure they act in the public interest.

The writer is a Supply Chain Management Consultant. [email protected]