Kibaki’s business model was people-centric, not populist » Capital News

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The late President Mwai Kibaki has been hailed as having transformed Kenya’s economy during his ten-year reign between 2003 and 2013. There is also consensus that the greatest beneficiary of the late leader’s economic policies is the Ordinary Kenyan.

Likewise, he was praised for “putting money in the pockets of the people through far-reaching interventions in financial markets, taxation and infrastructure.”
The irony of Kibakinomics (the term used to refer to his economic approach) is that while his government’s economic policies ultimately favored ordinary wananchi, he was not elected on a populist platform. Kenyans just wanted a leader who could reverse the disastrous economic policies of his predecessor, President Daniel arap Moi, and Mr. Kibaki did not disappoint.

A renowned economist, Mr. Kibaki was given the herculean task of revamping the economy. However, having been part of the establishment for most of his political career, one would have been inclined to think that his approach to managing the country’s economy would primarily favor business and the wealthy. But the ordinary man and woman have also benefited enormously from Mr. Kibaki’s efforts to put the economy back on a growth trajectory.
That the late President was able to achieve so much in improving the general welfare of Kenyans without pursuing populist ideologies is a lesson for leaders aspiring to lead Kenya that ultimately action speaks louder. than words to solve the real problems facing the wananchi.

Populism makes bad economics. As eminent scholars of the relationship between populism and economics, such as Dani Rodrick of Harvard University, argue, the hallmark of populism is that it claims to speak for the people, but fails ultimately. According to this school of thought, populists pursue “irresponsible and unsustainable policies that harm the ordinary people they claim to empower” and, as such, economists generally eschew populism.

During the 1992 and 1997 presidential campaigns, Mr. Kibaki formulated a reformist yet pragmatic economic agenda, focused on improving the social welfare of all Kenyans. For him, the economy comes first, hence his resolute desire to ensure a stable and growing economy as the foundation for the country’s sustainable development.
I will cite three major economic interventions that clearly demonstrate how Mr. Kibaki has transformed the lives of ordinary Kenyans without necessarily having to play the populist card.

The first was the decision to cut interest rates and reduce the Central Bank’s cash ratio requirement for banks, a move which saw banks, now awash with cash, literally fall on themselves. to lend money to individuals and businesses.
Access to affordable credit is an essential ingredient to catalyzing economic growth and, more importantly, improving livelihoods at the household level. Using the levers of monetary policy, President Kibaki has financially empowered the man and woman on the street, previously considered “unbankable” and therefore alienated from the financial system. The resulting strong demand for credit, especially among small and medium-sized enterprises, fueled the growth of microfinance institutions like Equity, which then became formidable banks.

Second, by turning to the capital markets to raise cheap money to finance development through a partial government divestment of blue chip state-owned companies like Safaricom and KenGen, Mr. Kibaki has enhanced retail investor participation in the Nairobi Stock Exchange (now Nairobi Securities Exchange). Millions of Kenyans have started investing in stocks and bonds for the first time through initial public offerings (IPOs), expanding investment opportunities for common mwananchi, through an institution of market previously seen as an elite club of wealthy players.

Third, by reducing taxes and levies on motorbikes, making it a more affordable and popular mode of transport, the Kibaki administration effectively paved the way for the rapid growth of the boda boda sector which today directly employs 1 million Kenyans, mostly young people, and generates 1 Ksh. billions of dollars in daily revenue. Listening to boda boda operators praise the late president is a testament to the cross-cutting impact of his leadership on Kenyans from all walks of life.

Fourth, President Kibaki is also credited with developing the country’s infrastructure, especially roads, thereby opening up towns and villages for trade, agriculture and investment. The flagship of its road infrastructure program, the Thika Superhighway has, over the past ten years, completely disrupted Nairobi and the surrounding counties.
One of the outstanding legacies of the former president was the establishment of economic and fiscal reforms aimed at expanding business, investment and livelihood opportunities for millions of Kenyans bereft of populism.

Another major legacy of Mr. Kibaki is free primary education. I still remember the former president’s first press conference after his inauguration. As a reporter, I attended the Friday afternoon press conference at State House.
The president was asked if the children should come to school the following week without paying school fees since he had promised Kenyans free primary education during the election campaign. He answered in the affirmative. He had kept his first promise. As he promised to transform the economy and the lives of ordinary mwananchi.

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Farewell, Mzee Kibaki, you have done your part for Kenya. Your legacy will live forever.
Mr. Choto is a legal and policy analyst. Email: [email protected]

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