Bumps in Kenya’s 2023 path and how to go around them

Last year was a difficult one. Many people across the world cited the increased cost of living as a major challenge they were facing.

Governments everywhere cited declining revenues and the inability to cope with increased demands for basic services. In Kenya, the cost of living and unemployment remained major challenges for many people.

The prolonged drought — unprecedented in the last 40 years — ravaged many communities and households and its effects continue to weaken households even now. The prolonged 2022 electoral period — and more so the campaigns — did not help.

As usual, our bumpy rides to elections always affect the economy. Elections become a concern for both domestic and international investors because of our tendency to antagonise one another. But the August 2022 election deviated from the norm. There was anxiety, but not at a level comparable to the previous elections.

Combined, these factors have firmed up developmental challenges in 2023. The drought and famine in the marginalised parts of the country remain a challenge. Many children dropped out of school. Many households have also lost their livestock to drought. Kajiado, among others, is estimated to have lost about Sh10 billion worth of livestock.

Turkana, Samburu and others have each lost livestock worth more or less this amount. This year is, therefore, going to be a challenging one for the marginalised counties, where many households have been impoverished by the shocks of the 2022 drought.

The Covid-19 pandemic washed the gains they had made. Their road to recovery has been bumpy from the early days of 2022 and worsened as the year came to an end. Helping these counties and households to recover in 2023 is and should be a priority of policymakers at the national and county level of government. I will return to what each should do later.

Agricultural communities did not do any better. Cereal farming continued to face the same challenges that have been experienced in the past. Rains failed in many parts of the country. And so was agricultural production.

A survey by the World Bank shows the sector contracted by 1.5 per cent in the first half of 2022. This negatively impacted the economy too. Economic growth shrank by 0.3 per cent especially because our economy is largely agrarian.

Rain-fed agriculture 

Food-producing regions have, ironically, become food insecure again because of drought and dependence on rain-fed agriculture. The drought worsened the living conditions in all the regions of the country. Without adequate production, 2023 is beginning at a point of a food crisis for many households. Yes, the government will be importing maize to fill the production deficit, but the problem is not the deficit.

The problem is the ability of households to buy maize. Many have no income. The drought and the prolonged effects of the Covid-19 pandemic have combined to weaken the capacity of households to be resilient. Many will have the challenge of keeping their children in school and feeding their families. Again 2023 will be bumpy for these and many other households.

The only sectors that seem to have been riding smoothly – though not at the pre-Covid-19 levels — are the service and the ICT sectors. The contextual factors for production in these sectors are radically different from the traditional agricultural sectors. I have argued that the service sector in this country is driven by a rapidly growing middle class and our youth are deeply involved in digital technology.

The tech-savvy youth and ‘tenderpreneurs’ are a new breed that are engaging in non-traditional activities — legitimate and others soaked in milking the public — which should be a focus of systematic research. They are new drivers of the economy that require attention in the manner we devoted to the ‘Jua Kali’ sector (the informal sector) some years back.

But how has the government of President William Ruto performed in laying a foundation for addressing these challenges? I must admit that reviewing any government after three months in office is not a just assessment.

An effective evaluation or review of performance is usually carried out after the first year in office because there is sufficient time to examine the policy pronouncements and implementation. It is also nonsensical to look for evidence to support what the government has done or not done in the first 100 days in office because this is not how evaluations or reviews are done. 

There have been many voices about failures and successes in these past 100 days. But we very well know that the actual evaluation of any programme of intervention does not take place before a year of implementation. All the same, one can look for pointers of what is going right and what is going wrong.

What is going right? First, rolling out the ‘Hustler’ fund e-loan was not a bad idea, but it is facing poor implementation. Every time you strike up a conversation with some of those likely to be the main beneficiaries of these loans, you get surprised by the common response: “It is too little to help me.” 

Gainful economic activities 

Barbers, taxi drivers, waiters, mkokoteni owners, boda boda riders, among others, argue that they received between Sh500 and Sh1,000 when they applied for the loan. Again all of them wish they could get anything above Sh10,000 to enable them to start a gainful economic activity. Asked what they consider enough to begin a gainful activity, they mention figures between Sh10,000 and Sh50,000 ($80 – $400). 

All this suggests a need to re-tweak the hustler loan even before moving to the next track of small enterprises. There are youths out there who want to use the loan to undertake gainful activities but the amount they are getting – with or without enough information – is not sufficient.

Turning to the cost of living and the loss of livestock in the marginalised areas, one can only say that enough has been said for many years. The arid counties have suffered many years of neglect. Today, the political leadership does not like hearing that marginalised counties get preferential treatment in terms of development funding. 

We have forgotten that the 2010 Constitution was meant to break with the past and help each and every county to address its challenges. The year 2023 provides a chance to firm up the implementation of many policies that have been swept under the carpet. Livestock insurance, leather industries, and abattoirs connecting to important markets, among others, are important interventions to pay attention to.

As we wait for maize imports to fill our production gaps, the question we need to ask is: why don’t we produce enough? Why do we produce a bag of maize at a higher cost than farmers in Uganda, Tanzania, Zambia and Malawi? Why do we import fertiliser which ends up in large- and mid-sized farms owned by well-to-do farmers? Why are we unable to support the smallholders who are the backbone of agricultural production in this country?

Answers to these questions will reveal that getting out of the bumpy 2023 growth path will require three things. 

First, credible political commitment to policies and more so commitment to laws and regulations. Credible commitment is a sufficient and necessary condition for getting things right. It is about ensuring effectiveness and consistency in the implementation of government — national and county — policies.

Secondly, there is a need to overcome coordination failures. Whether national or county government, the past 10 years have witnessed incoherence in how policies are made and implemented. 

Institutions do not coordinate — they shout and fight. Finally, there will be a need to pay attention to supporting access to education and health. These are basic services that are public goods that everyone requires for the future.

Supporting infrastructure — roads and provision of water and energy — will add value but addressing the immediate challenges that livestock farming and food production are facing remain the most important priorities.

Prof Karuti Kanyinga is based at the Institute for Development Studies (IDS), University of Nairobi, [email protected], @karutikk