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[Dehai-WN] Nation.co.ke: Behind the scenes

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Fri, 13 Jan 2012 21:06:12 +0100

Behind the scenes

 By ALPHONCE SHIUNDU ashiundu_at_ke.nationmedia.com
Posted Friday, January 13 2012 at 21:05

Battering for economy

The elections, devolution, the military incursion in Somalia plus a possible
recession in the Eurozone are among the reasons why Kenya's economy might
take a beating this year.

Financial experts, both within the country and Bretton Woods institutions,
have quietly pointed at these as signs of a "severe economic storm" lurking
around the corner.

The call is for the government to cut spending and manage public debt. But
then, with Operation Linda Nchi in progress and the Jihad declaration by
Al-Shabaab's Sheikh Ahmad Iman Ali, the security budget will inevitably have
to go up this year.

Already, the electoral team has requested Sh9 billion for the first polls
under a new Constitution, and there are the county governments to set up.

The pressure on revenues will be solved through additional support from
donors or, yes, the government will have to raise taxes.

Those in the know say that we're unlikely to see interest rates come down
because that will once again pump more money into the economy, increase
inflation and weaken the shilling further.

There are no guarantees that fuel prices will come down because of political
uncertainty in the Middle East. Inflation has been on the rise, but is
expected to dip if we harvest big because of the good short rains.

But if the long rains fail; we're doomed! Clearly, this is bad time to be in
charge of the economy. It gets worse if you're also eyeing the presidency.

Finance minister Uhuru Kenyatta and his mandarins at the Treasury have their
work cut out for them.

If all goes well, that's a sufficient boost to his presidential bid but if
anything goes wrong, well, they'd better be prepared to blame someone else -
as usual.


Investors will take cover

Still on the economy, word is, we also have to forget about investors (or
should I call them the private sector?), because, this is an election year.

Given our history of violence at polling time, plus the inevitable shift in
policy whenever a new government comes into place, investors will go into
"wait-and-see" mode. The experts insist that a shift in policy is inevitable
because of devolution.

The light at the end of the tunnel as far as investments are concerned will
be seen in 2013. That's assuming President Kibaki pulls off a flawless and
peaceful transition.

Storm over boundaries

We have to be ready for an avalanche of lawsuits as a result of the new
constituencies and boundaries.

That's if the Independent Electoral and Boundaries Commission does not take
into consideration the tonnes of grievances from politicians.

The reasons in some areas like Kisii are that clans have been split. In
other areas politicians just want constituencies carved out in their
strongholds so that they're guaranteed victory at election time.

One MP has vowed to go to court to block the boundaries if the IEBC sits
tight. And the public hearings haven't even begun!



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Received on Fri Jan 13 2012 - 15:06:19 EST
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