The year 2015 closed with the official announcement that Kenya’s economy grew by 5.8 per cent in the third quarter.
Given the upward trend from the first and second quarter growth of 4.7 and 5.5 per cent, the Treasury pronounced the outcome as an early sign of higher growth in the pre-election year of 2016.
Yet, in 2014 the economy’s performance in the first three quarters was 4.7, 6.0 and 5.2 per cent closing the full year at 5.3 per cent. Let’s wait for 2015’s full year’s number, after data cleansing, before we rejoice.
On a simple average basis, the Treasury’s revised lower target of 5.5 per cent for 2015 requires six per cent growth in the fourth quarter, while the upper target of six per cent requires eight per cent fourth quarter growth.
On a compounding basis, the respective fourth quarter growth requirements are 5.5 per cent and 7.4 per cent.
The more interesting question however remains the sustainability of Kenya’s economic growth. In the third quarter, construction (which accounts for five per cent of GDP) grew at 14.1 per cent, while agriculture (27 per cent of GDP) grew at 7.1 per cent.
Trade, transport and real estate (eight per cent of GDP each) and financial services (seven per cent of GDP) are our other “stars”.
But manufacturing (10 per cent of GDP) remains in stagnation, while tourism (one per cent of GDP) is officially in recession after eight successive quarters of decline.
Most important is the fact that nothing really special seems to be happening in our key economic enablers - electricity, water and ICT (one per cent of GDP each) – bringing to question the sustainability of our growth. Looking at this basic math, the jury is still out.
Reorganisation of government
Let’s now look at 2016 in words and storylines instead. We begin the year with a refreshed and resprayed team of Cabinet and Principal Secretaries, whose division of labour has been clarified.
That Cabinet Secretaries “do policy” and Principal Secretaries “do transactions” makes perfect sense.
The case study called Kenya has consistently shown over time that Cabinet Secretaries/Ministers always – without exception - get into trouble when they engage in transactions, while Principal/Permanent Secretaries are always exposed when they attempt to direct, rather than implement, policy.
Having reorganised his administration, President Uhuru Kenyatta’s next task will be to focus on delivery in 2016, especially with an eye on the 2017 elections.
He will start the race in the full knowledge that the 7-10 per cent GDP growth he promised in 2013 in order to deliver a million jobs a year will not materialise in this term.
The president knows that negative perceptions around the pillars of the Jubilee manifesto – Umoja (unity), Uchumi (economy) and Uwazi (openness) – will be campaign fodder for the Opposition, especially after a difficult 2015.
But he also knows that there is almost zero public awareness of the 103 Key Result Areas and 414 Key Performance Indicators that comprise Government’s Sector Performance Standards required to deliver Kenya’s 2030 Vision as a “globally competitive and prosperous country with a high quality of life”.
The latest version of these standards – which uses a baseline of 2012 and sets quantitative and qualitative performance targets for 2015, 2017 and 2030 was launched – very quietly - in March, 2015.
So quietly, in fact, that ministries, departments and agencies routinely ignore them, even though they are important links between planning, budgeting and performance management across government.
Which brings us to speeches. Speeches are an important part of any president’s tool kit, but they are also telling in what they convey as the administration’s priorities.
They are the equivalent of private sector board and senior management engagement with shareholders through the Annual General Meeting.
In 2015, Mr Kenyatta gave five major speeches to Kenyans as shareholders in the nation – the State of the Nation address (March), Madaraka (June), Mashujaa (October) and Jamhuri Day (December), and on New Year’s Eve – effectively he addressed 5 AGMs.
If we sift out the Queen’s English and reduce these speeches to their “bare bones”, we find that the standard gauge railway, increased electricity capacity and improvement of access to healthcare appear in every speech. Youth and women empowerment received regular mention, until the National Youth Service (NYS) saga.
Corruption, security and Huduma Centres received mention in four of the five speeches. Lamu Port South Sudan Ethiopia Transport (LAPPSET) corridor, roads, private sector development and foreign direct investment, national cohesion, devolution, social protection and foreign affairs/integration were mentioned at least twice.
Let’s “reverse-engineer” this trend of speeches into three areas of focus for 2016. The “visible” stuff – important for the election. The “invisibles” – that is, areas which will “go dark’ in 2016, and compared them with real action happening in the background. There are also the “wild cards”.
Transport and Infrastructure will clearly be the flagship ministry in 2016. All attention will be focused on the standard gauge railway and the hugely ambitious 8,000 kilometre road programme.
The railway was 60 per cent complete by December so should be almost complete in a year’s time.
About 1,200 kilometres of road is already under development, while 3,500 of the 8,000 kilometres is already contracted. This is before we consider ongoing airport and port projects, including LAPPSET.
The Energy and Petroleum ministry isn’t far behind. With all schools connected to electricity, focus will turn to pushing national access – up from 28 per cent in 2012 to 50 per cent in 2015 - to 70 per cent.
The third set of visibles reside in Health. The key visible will be the high-tech equipment expected to be installed in 94 county hospitals and four national referral hospitals. Only 15 hospitals, presumably including the national hospitals, have so far taken up this equipment.
In addition, we should expect continued visibility of First Lady Margaret Kenyatta’s Beyond Zero campaign – important for maternal and child mortality.
Further visibility will reflect other achievements in the Health sector since 2012 – access to antiretrovirals (ARVs) by HIV-positive pregnant women, malaria control, tuberculosis treatment, de-worming of school children, cervical cancer screening for women and deliveries by skilled attendants at public health facilities – all show upward trends.
The fourth visible in 2016 will come from two major international conferences, Japan’s Tokyo International Conference for Africa’s Development (TICAD) and UNCTAD 2016, both of which will bring new kudos to the ministries of Foreign Affairs and Industrialisation.
The final visible will be the return of a revamped empowerment agenda for youth, women and marginalised and disadvantaged groups. Questions around NYS and the Youth Enterprise Fund will have been settled, and appropriate action taken, setting the stage for a renewed effort all the way to 2017.
These five visibles will be underpinned by the three C’s Mr Kenyatta must consistently think about after a tough 2015 – (National) Cohesion, (War on) Corruption and Coordination (of Government).
Much of the rest of government will proceed with its work “invisibly”, while offering a few “visibles”. Education – while implementing the laptops project – will focus on the curriculum review.
Lands and Housing – targeting 3.7 million new title deed issues in the medium-term – will focus on a new national urban (management and development) policy. Interior will use law to “keep us safe and secure”.
With the future in mind, ICT – while supporting ongoing e-Government initiatives – will recalibrate the much-vaunted, but poorly implemented ICT Master Plan.
The National Safety Net to support vulnerable persons will continue its rapid expansion. Sports and Culture will continue to “safeguard our artefacts”.
Tourism and Agriculture will, for differing economic performance and project financing reasons, continue with official “business as usual” while taking a step back for a complete strategic re-think.
And the “wild cards”? The two central ministries that are at the heart of government coordination – Planning and Treasury – might take this brief, quiet moment away from the “pre-election” limelight to do their own strategic re-think.
Especially with the Office of Management and Budget as context.
If Mr Kenyatta – without ignoring the visibles and invisibles – quietly directed this Planning-Treasury-Office of Management and Budget rethink, that might probably be his best “wet work” of 2016.
Mr Kabaara is a management consultant. Email: [email protected]