Under Moi regime, the economy took a beating
By People Daily, February 5, 2020Retired President Moi passed on yesterday, leaving a mixed legacy. His management of the economy was characterised by 24 years of perpetual turmoil and disruption.
The economy hardly found a rhythm that would have enabled it to fire from all cylinders. Ultimately, for Moi, politics stumped all economic prudence.
Moi took over the country’s leadership in 1978 after the death of founding President Jomo Kenyatta.
He only had a short honeymoon of about three years before the economy encountered its first major turbulence—when soldiers from the Kenya Air Force attempted to overthrow his government in 1982.
From the shock of that event, Moi tightened his grip on the country, and resorted to strong-arm tactics to rule.
As independent voices were silenced, political barons assumed ascendancy, and voices warning about the nose-diving economy were muffled. The economy took a beating.
Major public and private sector companies collapsed either through mismanagement, or poor economic policies that allowed political barons to bring in massive imports, choking markets for local manufacturers.
Such businesses included Kenya National Assurance Company, East African Bag and Cordage, and Uplands Bacon factory.
Others remained on their feet but required perpetual massive bailout from the Treasury to stay afloat.
Kenya Power Company was one among many such public corporations.
As political repression continued, political agitation intensified. As the 1980s came to an end, the agitation to revert Kenya to a multi-party system became intense. Political unrest became the new normal, and the economy remained depressed.
Moi was forced to rely heavily on bailouts from the World Bank and the International Monetary Fund (IMF) to fund operations.
As a consequence, one of the most enduring characteristics of Moi’s economic management was the larger than life presence of the WB and the IMF in Kenya.
Their presence loomed over all economic decisions, policy direction, and budgets.
Evaluation and monitoring teams from the WB and IMF were a regular feature in Kenya, and they would keep the country on tenterhooks wondering what their reports portended at any one time.
That is how the country came to adopt the ruinous Structural Adjustment Programmes (SAPs ) that all but destroyed Kenya’s social capital.
Under SAPs, Moi introduced user charges and cost recovery for all social programmes like education and health, locking out millions of poor Kenyans from accessing these services.
The ensuing economic hardships visited on Kenyans, coincided with the then multiparty agitation, further pushing the economy into the red.
Enter the 90s, and Moi was forced to accept a return to multiparty politics, and an election where he was forced to compete against other presidential candidates.
Fighting against a huge wave of disenchantment, Moi threw the economy under the bus. His KANU party printed billions of shillings for campaigns, and his pointmen around the country threw money at the election.
It was an economic disaster. The result was an economic meltdown that the country spent the next five years correcting. The shilling collapsed, prices of basic goods increased by the day.
After the 1997 elections, then newly-appointed Finance minister Simeon Nyachae, was so dismayed by the situation he found at the Treasury that he made the now famous declaration, “The economy is in ICU!” He was relieved of his duties shortly thereafter for his pains.
The tumultuous economy was probably one of reasons why NARC, under President Mwai Kibaki, swept into office in the 2002 elections, heralding a new era of economic growth and opportunity not seen in Kenya for decades. —ndungum49@hotmail.com