There is no question that the administration of President William Ruto inherited a broken economy, characterised by high consumer prices, debt distress and shambolic macroeconomic management. The effects are still reverberating. Risk assessment firm, Moody’s Investor Services has even downgraded Kenya’s creditworthiness on high debt obligations.

There is also no question the government has done a commendable job of stabilising the economy. None other than the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, praised the administration’s economic stewardship. She said the country was headed in the right trajectory for growth.

However, some things cannot wait any longer and people are reaching breaking point. The cost of living is still too high. Prices of basic consumer goods have maintained a stubborn inelasticity, only inching down painfully slowly. But the most debilitating thing is that people are broke!

The economy is headed for seizure, no doubt about it. There is literally no money anywhere. Small and medium-sized businesses are completely stuck! That is bad news for majority of Kenyan households as they rely on SMEs for their livelihoods. People are going through very tough times.

Cash is the lubricant that keeps the economic engine running. Without cash, the economy seizes.  The Government must urgently inject some cashflow into the economy. It must find ways to put money in people’s pockets. It must find ways of ensuring that salaries of public servants are paid on time, all the time. Some entire regions depend on the salaries of the public servants employed there, both at county and national levels. Without salaries, some areas in Kenya have no cashflows at all.

Of course, the big question is, where is the money going to come from? The lowest hanging and obvious fruit is privatisation.

Late President Mwai Kibaki used privatisation to very powerful effect. He used the proceeds of privatisation to support his budget, and increase asset ownership among Kenyans. He was not conflicted at all about privatisation and how it can be used to impact his development programme.

President Ruto has been very forthright about privatisation. From his utterances, he is also not conflicted at all about privatisation. Indeed, he promised the country in October 2022 that his government will be selling at least six state-owned firms through the Nairobi Securities Exchange (NSE).  There are companies that the government can very quickly monetise. Companies like Safaricom, Kenya Commercial Bank, Kenya Electricity Generating Company, Kenya Reinsurance Corporation require very little work to get onto the market, just a transaction advisor. Their prices are already market determined, the number of shares available already known, and the process is straightforward.

The potential is in the billions of dollars. The proceeds should go into a sovereign fund from which the Government can borrow cheaply on a long term basis.  The quickest way to inject money into the economy right now is pay public servants on time, start settling pending bills and procuring goods and services by Government, and rollout an economic stimulus programme.  The Government needs to fast track all the investment deals it has been announcing since it was sworn into office last year.

Further, the Government can also use privatisation proceeds to settle the one-off payment of the $ 2 billion Eurobond that is due in July 2024. This will completely cool off the pressure the Government is now under as it cracks its head mulling where to get the money to pay the Eurobond, and pay recurrent expenses that keep cash circulating in the economy.  The viability of Kenya is under threat. Everything is now a crisis. Desperate times call for desperate measures. Treasury mandarins seem stuck in a rut.

The priority number one now must be to inject money into the economy, which is getting dangerously close to seizure. This is usually the trigger for an economic meltdown. In the tribally riven and politically divided society that is Kenya, Sri Lanka would be child’s play. An economic meltdown must be avoided at all costs!         

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