Topic: The making of ‘Kibakinomics’

By MORRIS ARON and
TIMOTHY MACHI

He was once a carpenter.
Then he tried his hands at
the exacting masonry.
When all was not enough
to take care of the bills, he
even had a stint as a tout in the defunct Othaya African
Bus Union fleets.

From Mwai Kibaki’s early
experience in the tiny mud
hut they shared as a family
to the sore nights in an
uncomfortable wooden
bed only made a little comfy with hay in
boarding school, the
capitalist in him emerged —
resolved and steeled.

In the early school of ‘hard
knocks,’ Kibaki picked one
vital lesson that endures to
date — that to make a
living, one must work
hard.

This thinking is the very
epitome of Adam Smith’s
book The Wealth of
Nations that forms the
basis of modern economics.

Kibaki graduated from
Makerere University with a
First Class BA degree in
Economics, History and
Political Science.

He earned a scholarship to
the prestigious London
School of Economics where
he graduated top of the
class with in MSc in Public
Finance.

Those looking at
explaining Kibaki’s legacy
say with such credentials,
there was no denying he
was destined for great
stuff.

But now as Kibaki readies
to retire from politics as
Head of State, economists
will be posing the hard
questions. What exactly is
Kibaki’s economic legacy? Was it all worth the effort?
Boiling Kibaki’s economic
philosophy down to bare
essentials, James Shikwati,
Director of the Inter
Region Economic Network, described him as Adam
Smith’s half-hearted
disciple. Wild consumerism
“While they both placed a
premium on hard work,
Kibaki as President
presided over the growth
in wild consumerism, credit taking and huge deficits —
contrary to Smith’s school
of thought,” says Shikwati. In his book, The Wealth of
Nations, Smith challenged
people and nations to
practice not just hard
work and enlightened self-
interest but also thrift.

Under Kibaki’s regime,
however, Kenyans have
witnessed more empty
grain stores at both
national and village level,”
Shikwati, described by Wikipedia as a libertarian economist, says. “The country’s surging appetite for luxury is
epitomised by the many
shopping malls dotting
streets in cities, increasing
number of fuel guzzlers on our roads and the craze for
palatial homes,” he says,
adding that the fact that
Kenyans are rushing in for
credit cards point to
expenditures that outstrip income and dwindling
savings.

Aly Khan Satchu, a Nairobi-
based investment analyst,
shares in Shikwati’s
sentiments, saying Kibaki’s
administration has failed to
take a knife to the recurrent expenditure.
“In fact, this year for the
first time — total projected
revenue (Sh956.9 billion) is
less than the recurrent
spend as captured in the 2012-2013 budget (Sh1.45
trillion),” Satchu says.

Dr XN Iraki, economics
lecturer at the University of
Nairobi, says throughout
his tour of duty, Kibaki stayed on course in his
economic philosophy —
following the Keynesian
model all through. That is,
save for the tidings of
politics. Keynesian economics
advocate active
government intervention
in the marketplace —
including determining the
size and rate of growth of the money supply, interest
rates — as the best method
of ensuring economic
growth and stability.

Source: The Standard

In 2005 during the
height of the 1st
referendum, when the
"adui motto" train was
just coming into
town...kenyas GDP per capita was just $500 per
person and our budget
was partly funded by
donors....well according
to the U.N a country with
a GDP per capita of $1000 plus is considered a
middle income
country....Kenya is on
schedule per IMF to reach
middle income status by
2016, if it maintains, just a 4.5% growth rate per
yr till then, with an
estimated GDP per capita
of $1088 per kenyan, I
repeat per KENYAN not
just kikuyus...and 100% kenyan funded
budget...bypassing
Europe and doing
business with china was
total genious
baks...today Europe is a continent in need of
massive bailouts...oyeah
Spain just got another
bailout of 100 billion
euros on saturday, next
will be Britain or Italy...and China is where
the begging bowl is
pointed...how times
change, mmhh...