President William Ruto’s recent trip to Japan to attend the Tokyo International Conference on African Development had one very pleasant outcome for the President and his team.
This is that, by and large, the mainstream media coverage of the deals he is reported to have struck there were positive.
There was a time about a year ago, when any initiative the President took that involved loans of any kind met with fierce opposition among media commentators, and declarations that Kenya was sinking into ever deeper and unsustainable debt.
I think in time it has become clear that not all loans are equal. And that not all loans are “unsustainable”.
Now, like all ageing “media veterans” I am very slowly coming to terms with the use of artificial intelligence programmes (or is it “software”?).
And so, to illustrate my point, I used an AI-enabled search engine to get some data on why loans from Japan have an advantage over those of other donor nations. Here is what I found:
“The standard interest rate charged by Japan on development loans to poor countries, specifically Low-Income Least Developed Countries (LDCs), is 0.40%. These loans also typically have a very long repayment period of 40 years including a 10-year grace period. This concessional rate applies under the Enhanced Private Sector Assistance for Africa (EPSA) initiative and other similar frameworks aiming to support poorer countries with affordable financing terms.”
The American Nobel laureate in economics, Paul Krugman, who is also a prolific media commentator, often warns against analysing national budgets with the same frame of reference as we would use when doing our own household budgeting.
But all the same, I believe that most readers would agree with me that if the ubiquitous Kenyan “digital loans” offered such low interest rates, and increased loan limits exponentially, virtually any middle-class Kenyan could afford a nice three-bedroom apartment in Westlands or Lavington.
But if there was rejoicing among the President’s supporters, then such rejoicing was premature. For although Kenyans will always insist that their top priority is the economy – and at a personal level, economic opportunity, especially for their children – that is not what voting patterns thus far have revealed.
This is one of the fundamental contradictions of Kenyan politics, which defies all logic.
And for any serving president, running for re-election on the basis of your performance in managing the national economy is a very risky undertaking.
If the election campaign is focused on economic performance, this automatically favours the challenger in any presidential race. For all the challenger has to do is to argue that the president has not delivered on the prosperity he promised. While the president has to go into details of sectoral policy initiatives that will improve productivity, etc, something most voters cannot understand, and really do not want to hear.
To date, the Kenyan president who achieved the most in matters of economic growth is Mwai Kibaki. But I do not recall him ever declaring in a public speech that his key objective was to expand the Kenyan middle class.
And yet, we could define the primary task of any president in a modern democracy in precisely those terms: democratic leadership should ideally bring about the flourishing of individuals as well as communities, and in the process increase the numbers of those who qualify as members of the middle class.
To use our own examples here in Kenya, our middle class, defined by its possession of disposable income, does much to improve the prospects of many others, including even the very poorest among us.
Middle class Kenyans create employment in homes by being able to afford multiple semi-skilled domestic staff; improve tourism revenues by going on vacations at “tourist-class” hotels, and keeps hotel staff employed even during the “low tourism season”; raise salaries paid within academic institutions by sending their children to private schools and colleges, and, of course, they pay more taxes which the government can use for roads, water and sanitation, healthcare programmes, etc.
For those of us old enough to remember, one emblematic sign of Kibaki’s success in managing the nation’s finances was that we suddenly had the worst traffic jams ever. Much worse than during his predecessor Daniel Moi’s presidency.
But what these many cars on our roads really signified is that more and more Kenyans could now afford to buy personal cars. In other words, these cars were a sign of Kenya’s rapidly growing middle class.
