The talk in town has already shifted from the impact on economy of the controversial Finance Act 2018 that has hardened life for Kenyans following heightened inflation after 16% VAT was slapped on essential commodities and services, to a referendum on the 2010 Constitution.
Has the public already resigned to the fate of increased cost of living as the new norm, or are the people lying in waiting to use the referendum to amend some economic anomalies?
The high cost on fuel products and banking and communication services among other essential sectors has brought untold suffering to the masses. The purchasing power on subsistence goods has gone down and the rate of unemployment has skyrocketed as companies streamline their structures to cope with the emerging economic scenario.
This has resulted in retrenchment, declaring of some stations in the line of production redundant and in the worst-case scenario, relocation of some companies to the more competitive economies in the region. Resultantly too, the crime rate has gone up as the majority in the low class cadre struggle to eke a living. That is the state of the economy despite figures showing a 6.3% GDP growth in Q2 of 2018 as compared to 4.7% in the same period last year.
The last referendum the country had was in 2010 on the proposed Constitution, which carried the day. It was largely a political referendum, focusing more on individual freedoms that had over the years since independence been emasculated by successive governments. Too, it brought Devolution, which has seen services decentralized to localized units called counties. The tragedy however is, runway corruption in a majority of the counties has negated would be benefits of Devolution. We’ve incurred record-breaking debts at market rates for which the citizens will pay for many years to come but with little to show for it.
The Kenyan people have the unprecedented opportunity to make the touted referendum, should it come to pass, about the economy. How about, for instance, limiting the government of the day to borrow that which it can only repay within the five years for which it got the mandate from the people? The carte blanche that the government of the day has, to borrow on behalf of the country without regard to when and how the repayment will take place is not good for the economy especially where leadership falls into the hands of individuals whose appetite for unaccountable borrowing is insatiable – just food for thought!
