Michael Mundia Kamau
                                P.O. Box 58972
                                00200 City Square
                                Nairobi
                                Kenya

                               17th April 2004

               KIBAKI’S BLANK CHEQUE

One of the key highlights of President Kibaki’s Easter weekend tour of
his home district of Othaya, was his advise to locals to take advantage of
the prevailing low interest rates and seek cheap credit from commercial
banks.
President Kibaki made it sound so easy but failed to back up this huge
announcement with a tangible government policy paper.

The announcement itself was greeted and treated with the typical
scepticism characteristic of the public mood in Kenya today. It was made in tandem
with a plea from President Kibaki to locals to work harder and spend much
less time, money and effort in the consumption of alcoholic brews.
Pressident Kibaki’s views are valid, but are being made in the midst of several
outstanding issues.

For one, President Kibaki did not address the issue of huge outstanding
funds owed to farmers in the locality and beyond. The cost of farm
inputs vis-a-vis returns has also been a perennial grievance of farmers in
Kenya for far too long. The problem has been compounded by poor roads to
collection points and delayed payments. These problems existed even
during President Kibaki’s ten year tenure as vice president from 1978 -1988.
Disillusioned farmers have over the years either staged protests and
boycotts or engaged in reckless partying when paid their infamous
bonuses. Others have altogether uprooted traditional cash crops like tea and
coffee in favour of horticultural produce that has a more stable market.

It had been hoped that the NARC government would quickly and
conclusively address the major problems in the farming sector, which it so far has
not. Were this to happen, farmers would probably find no cause to approach
commercial banks for credit, as advised by President Kibaki.

It is also inappropriate for President Kibaki to attack the consumption
of alcoholic beverages in Kenya without addressing the root cause. The
very political structure that enabled President Kibaki become President of
Kenya has contributed immensely to alcoholism in Kenya. Politics and
political  campaigns in Kenya have always been associated with money, booze,
women, sleaze and partying. It reeks of double standards to pour scorn on one
part of the engine that has helped build political careers in Kenya and
reveals problems of a much larger scale. It is probably why President Kibaki’s
announcement was greeted with the usual scepticism.

Related to this are numerous unresolved issues in the huge cooperative
movement in Kenya. Wisely sensing revolt, the government recently
quickly backtracked on proposed legislation that would have streamlined the
controversy riddled cooperative sector. The fast recovering National
Bank of Kenya is unduly targeted by the Kenyan media whenever it wants to give
an example of a Kenyan corporation that has been massively mismanaged, at
the expense of the numerous equally mismanaged Savings and Credit
Cooperative  Organisations (SACCOs). SACCO funds are extremely stretched and
overdrawn and if an independent impromptu audit were to be suddenly done on them,
the National Bank of Kenya would be made to look angelic. SACCO funds are
stretched and overdrawn because many Kenyans have come to rely on them
in these desperate times. SACCOs are a conduit for officials and members
to access and abuse funds with reckless abandon and this is why
Cooperative Minister Njeru Ndwiga’s proposed legislation met with rebellion from
the SACCO movement. SACCO rules are laxer, more convenient, more flexible
and much more subject to abuse, than the sterner more stringent rules of
commercial banks, and President Kibaki cannot claim not to be aware of
this.

 
If President Kibaki’s government cannot reign in the indiscipline in
the cooperative movement, it has no business pointing a finger at the
apparent illicit behaviour and lazy habits of farmers in Kenya. Further, if
President Kibaki’s government is brave enough to legislate the much needed
reforms in SACCOs, funds would be freed for equally much needed reform in the
farming sector and beyond.

The government’s call to Kenyans to take advantage of the prevailing
low interest rates is in itself the a monumental undertaking that must be
backed by nothing short of a government sessional paper. Agreements must be
drawn up backed by intricate and lengthy litigation. Logistics involving the
provincial administration, the Kenya Police and fraud agencies, must be
put in place. Training of personnel, the bulk of which will come from the
demoralised civil service, must be catered for. The issuance of fake
certificates of competency in ongoing public transport sector reforms,
stresses the importance of proper planning. Economists and planners
will also be required to draw up contingencies for this massive infusion of
funds into the economy. Economists will further be required to play a leading
role in training borrowers on the management of funds. This is important
because many African-Kenyans do not possess business skills. We act on hearsay
rather than researched facts and this has resulted in numerous
insolvencies.

It is common in this country for African- Kenyans to act on statements
such as “I know someone who started a cyber-cafe last year, and he (or she)
is now doing very well”. Ventures and much needed infrastructure will
therefore require to be identified and put in place. An undertaking of this
magnitude can easily cause a revolution if poorly managed.

President Kibaki could be President of Kenya for the next nine years as
allowed for in the present constitution, and it could take these nine
years to just lay the foundation of what President Kibaki proposes and the
nine from 2013 to 2022, to implement. Ours is a country in serious need of
direction and it will take much more than the casual declaration for
individuals to seek cheap credit from commercial banks, for this
country to attain Rostow’s Stages of Development. The future of this country and
it’s people ought to be inspired by the powerful remarks of Michael Douglas
in “The American President”, “This country has serious problems, we need
serious people.”



Michael Mundia Kamau