We must not be distracted from core challenges

It is essential, indeed critical, for Kenyans and Kenya as a nation to stand back from the rhetoric, propaganda and increasing animosity and stare reality in the eye.

It is urgently necessary because we must realise we have come from far since we voted in the 2010 Constitution. It is important to build on this and not regress in any form whatsoever.

In tandem with my plea is for us to forearm ourselves for crunchier and exceedingly challenging times ahead regardless of what is taking place on the streets.

Let me touch on one lie, which is being peddled. It is that cheaper maize is around the corner with impending imports. I wish that was true but the facts on the ground tell a different story.

Only in an extremely good year does Kenya produce enough maize for itself. Our last main maize crop in the latter part of last year will last us for another month maybe — or if we are lucky, two months.

The traditional surplus crop from North Rift and Trans Nzioa was not good and so we need to fill the gap until we get a crop from the current rains and at the same time scavenge whatever we can get from around the world whether it be white or yellow, organic and even genetically modified.

Food surpluses

The reality is that there are not great food surpluses around the world that we can tap into. Indeed, international food prices have been rising like crazy and duty free maize will not land here any cheaper than current domestic prices. If anything, it could be more.

I do not want to sound like a spoiler but the route of subsidies is a double-edged sword and could rebound, just like the subsidised fertiliser offer is.

First, the government is strapped for cash, especially as it gets further towards the end of its financial year. It still owes millers money from the last subsidy spree by the former government. Even with the best will in the world it literally cannot afford subsidies.

Second, subsidies tamper with the supply and demand equation which at the end of the day ultimately determines the price paid. You run the danger of creating two prices: the official and hence theoretical price where the supply is likely to be inadequate or the real price where supply meets demand but is more costly.

The government is caught between a rock and a hard place because the subsidy route is tempting but is fraught with danger and can backfire very quickly.

There is another important consideration. The government is already foregoing huge revenue with duty free windows on maize, wheat and rice. That at a time of deficit after deficit is a very difficult situation to manage.

Adequate rains

The food issue is undoubtedly going to get more complicated and expensive. At the end of the day we are a net food importer in a world with little or no surpluses and an uncertain few months ahead even if we get adequate rains.

An indicator of that is how the government is trying to do a barter agreement with Pakistan, exchanging our tea for their rice. It is a pragmatic move if managed well.

But that is only one of several worries. The government is behaving as if it is in denial. Cheaper, or more affordable maize, is still being promised when it appears near impossible to attain that goal for the foreseeable future.

The danger is that you create false expectations which in the case of food is a dangerous game.

Then add on the way the government is spending or making commitments on money it does not have at a pace that is at lightning speed. Some of the 50 Chief Administrative Secretaries (CASs) are in their offices when legally and constitutionally they should not be.

We need to bear in mind how close the vote was and that, in short, half the population voted the other way. In other words, the government’s support base is arguably on the tenuous side and needs to be consolidated rather than weakened.

The way it is spending and committing money on allowances and on increasing the size of government such as the CASs is mind blowing to say the least.

To put it another way we, the public are being told to tighten our already tight belts when the administration is splashing out huge amounts of money on making an obese and bloated government even larger.

The way this is being done with mind boggling speed makes one wonder whether it has been thought through financially because it is clearly unsustainable.

Debt issues

Sooner rather than later the government is going to run into serious cash flow and debt issues. How much more can it burden an already hefty domestic debt situation?

Third, we are alarming our international creditors to whom we are already heavily indebted. Borrowing from the International Monetary Fund and others lenders will become less and less of an option.

I have no inside knowledge on this but guess these institutions have done their figures and are sending diplomatic signals to government saying this cannot go on for much longer.

Fourth, and as important, we are making overburdened Kenyans more fractious, restless and angry.

Remember these are people already bearing the brunt of inflation that could easily rise into double digits.

Fifth, times are exceedingly precarious and arguably fractious. The name of the game should be to ease the pain and try to reduce the problems rather than compound them.

In conclusion the ride ahead over the next few months is going to get increasingly bumpy. I get the feeling government has not taken that fully on board yet.

Or could it be that the relevant parties are more interested in their own power games and egos than the good of the people?

The writer is a public policy and economic analyst:[email protected]