This archive report was first published on 7 January 2020.
As we begin a new decade, the question on everyone's mind is: what does 2020 hold for Kenya? While opinions are divided, I am cautiously optimistic about the country's economic prospects.
One of the main reasons for my optimism is the adequate rainfall that much of the country has experienced. This has replenished water tables and spurred agricultural activity, which is a key player in our economy. As a result, I expect to see a checking of inflation in the coming months.
Another factor that gives me hope is the reasonable harmony in the country. This is critical and should never be underestimated or assumed. Disharmony and social conflict can hold back investment and other productive activity, and I believe that Kenya has made significant strides in this area.
The repeal of the 2016 interest rate caps is also a positive development. These caps had become an impediment to the economy and had resulted in a downturn in credit availability, especially for small and medium-sized enterprises (SMEs). With the caps gone, I expect to see an increase in lending and credit availability, which will in turn boost economic activity.
Other basic drivers of the economy, such as tourism and horticulture, are also performing well. Tourism is having a good high season, with handsome earnings and generous foreign exchange inflows. Horticulture continues to perform strongly, and the heavy rains have strengthened the tea industry.
However, I must caution that corruption and looting continue to deny Kenya three percent of economic growth every year. This is a significant issue that must be addressed if we are to achieve take-off. The tentacles of graft are pervasive and far-reaching, and they gnaw away at the social fabric and can collapse it.
Despite these challenges, I believe that there is a genuine effort to contain corruption. The appointment of Kinoti and Haji as the Director of Public Prosecutions and the Director of Criminal Investigations, respectively, has heightened expectations. However, it is essential that the Judiciary continues to increase its capacity to handle and dispense with the multitude of cases thrown at it.
Ultimately, the success of the graft war will be measured by the number of convicted 'big fish' who are carted off to serve jail terms. If that happens, the lid on corruption will have been firmly placed, and containment will go from strength to strength.
