By Eric Omwega
Earlier this year, Kenyans went to the polls to elect their fourth president. Many considered this year’s election as one of the most crucial in the nation’s 50-year history as it was the first election under the new constitution that called for a devolved form of government. While the presidential election was hotly contested, it is instructive to look into the country’s best kept secret for economic growth under the leadership of former President Mwai Kibaki – non-interventionist policies.
Up until the election of Mr. Kibaki in 2002, most sectors of the economy were under direct control of the government. State-owned corporations such as the Kenya Power and Lighting Company had failed to cater to a majority of the population. Economic growth was stifled with resources allocated to government cronies. Corruption was rife and bureaucracy was suffocating. The result was a stagnant economy that regressed in real terms through the 1990’s as other economies around the world were capitalizing on positive global trends of technology and globalization.
Figure 1: GDP data visualized using thinknum (http://www.thinknum.com)
In my opinion, Kibaki’s genius was to limit government interference in the private sector. He embarked on an ambitious program to privatize non-performing state corporations including Telkom Kenya and Kenya Railways. What were the results? Kenya’s average GDP growth in his ten years in power has doubled from the lackluster growth from a decade earlier.
Kenya’s hobbled road infrastructure has been improved with new superhighways in service and other in construction, regional trade has vastly improved, and corruption has been reduced. Perhaps one of the more prominent success stories has been Safaricom which was minority-owned by Telkom Kenya. Safaricom’s M-Pesa mobile money network is now the most successful implementation of mobile money in the world.
On a recent trip to Kenya, I got a chance to catch up with Dr. Bitange Ndemo, the Permanent Secretary in the Ministry of Information and Communications. He talked about how he has leveraged public-private partnerships to build out Kenya’s tech infrastructure. The results are evident for all to see – Kenya, along with Nigeria and South Africa, is now considered Africa’s leading hub for innovation and information technology.
What does the future hold for Kenya? I think the answer lies more in the government’s ability to implement policies that are less invasive and that foster free enterprise and the growth of businesses. With the devolution of the government and the creation of new county governments that are in charge of local budgets for infrastructure, education, etc, whoever is in State House matters less and less to the common Kenyan.
Eric Omwega is co-Founder of Thinknum