The state of Kenya’s economy is currently the subject of huge debate and focus, with the

country facing a debt crisis. 

In March, salaries of civil servants were delayed as the government prioritised paying off maturing debt. The two men in the eye of the storm are the Cabinet Secretary, National Treasury and  Economic Planning,  Prof. Njuguna Ndung’u, who is also the former Governor of the Central Bank of Kenya, and Dr. David Ndii, the Chairperson of the President’s Council of Economic Advisors.

In the battle of the two leading economists in the Kenya Kwanza government, Dr. Ndii’s loudness is rivaled only by Prof. Ndung’u’s silence. Dr. Ndii has become the mouthpiece of the Kenya Kwanza government’s economic plan, using his Twitter platform to wage battle with all and sundry and also regularly appearing on TV to make his case. 

Meanwhile, Prof. Ndung’u is conspicuously less vocal. A cursory glance at their Twitter footprint tells a tale. @KeTreasury is the official Twitter handle for the National Treasury and it is mostly used to post the official meetings held by the ministry’s officials. There is no interactive engagement with the public and it boasts a measly slightly over 34,000 followers.

In contrast, @DavidNdii, which is the Twitter handle for President William Ruto’s Chief Economic Advisor boasts of one million followers and is a beehive of activities with Ndii dishing out economic information and abrasive banter in equal measure.

On Saturday, April 8, Dr. Ndii tweeted, “Is public finance that difficult? It’s reported every other

day debt service is consuming 60%+ of revenue. Liquidity crunches come with the territory. When maturities bunch up, or revenue falls short, or markets shift, something has to give. Salaries or default? Take your pick,” thus lifting a lid on the current difficult economic situation Kenya is in.

From the National Treasury CS? Silence. The Professor is a reluctant Twitter user with only three posts in April so far – on the 3rd, 6th, and 13th – all of them about meetings and none with information about the country’s dire economic situation.

It was only on April 10, that Prof. Ndung’u is quoted by the Daily Nation as saying, “The national government is caught between two extremes; high level of debt financing and

financing constraints due to limited access to finance in the domestic and international financial

market.”

Kenya Revenue Authority also weighed in on the situation stating that it had played its part in

revenue collection. In a statement issued on April 10 and signed by Acting Commissioner

General Rispah Simiyu, the authority stated that: “As at the close of March 2023, revenue

collection averaged 95.1 percent on original target and 93.4 percent on Supplementary target,

representing a collection of Ksh1.554 trillion and a year-on-year 8 percent growth.

This scenario begs the question, who exactly  is driving the economic agenda in Kenya

Kwanza government.

The National Treasury derives its mandate from the Constitution 2010, the Public Management Act 2012, and Executive Order No.2/2013. Among its core functions are:

• Formulate, implement and monitor macro-economic policies involving expenditure and

revenue;

• Manage the level and composition of national public debt, national guarantees and

other financial obligations of the national government;

• Formulate, evaluate and promote economic and financial policies that facilitate social

and economic development in conjunction with other national government entities;

• Mobilise domestic and external resources for financing national and county government

budgetary requirements;

• To prepare the National Budget, execute/implement and control approved budgetary resources to MDAs and other Government agencies/entities.

The President’s Council of Economic Advisors which is borrowed from the American

presidential style is a new phenomenon in Kenya. 

According to the White House website, the Council of Economic Advisers is an agency within

the Executive Office of the President, which is charged with offering the President objective

economic advice on the formulation of both domestic and international economic policy.

The roles of the Treasury and the Council of Economic Advisors appear to overlap and

there is a need for clear lines of communication and policy direction for optimal performance.

When earlier this year Dr. Ndii got himself entangled in a Twitter clash with Kenyans over the cost of electricity, Deputy President Rigathi Gachagua, in a joint-TV interview with major Kenyan TV stations, stated that public policy is only pronounced by the President, the Deputy President, or the respective Cabinet Secretary and not by advisors.

But in an Easter Monday interview on Citizen TV, Dr. Ndii appeared to hit back stating that while he may not pronounce policy, he “pays more attention to economic issues than the Deputy

President does.” He also explained that while the Treasury CS is bogged down with meetings, the economic council does the technical work with officials in the ministry. But what made the news were the brazen admissions by Dr. Ndii among them that, “Government is extremely wasteful. People in government are unbothered. Independent bodies are helpless.” While hei is the vocal chair, the Council of Economic Advisors also consists of former East African Community Cabinet Secretary Adan Mohamed, Mr. Mohammed Hassan and Dr. Nancy Laibuni.

Good governance practice indicates that economic policy should be communicated by relevant

line ministries and not by the President’s advisor. This limits the possibility of messaging

inconsistency, personal bias, and policy contradiction.

Dr. Ndii is like a board director in a corporate setting, his views can be taken or ignored by the

President.

On the other end, the CS and PS National Treasury are guided by public policies on finance or

economic planning policy e.g the medium-term debt strategy, or even the budget policy

statements. These are the documents that should be referred to check for consistency.

Additionally, government officials must remain bound by the public officers’ code of conduct and of course, Official Secrets act as they hold positions of trust. Only designated spokespersons should articulate sensitive public policy matters with due care for that matter.

Away from Dr. Ndii’s acerbic tweets and too-honest talk, Prof. Ndungu’s silence and the apparent cross-communication in government, the crux of the matter is the chickens are coming home to roost for Kenya’s economic decisions for the last decade with debt almost overtaking what is collected.

According to the Daily Nation, the government collected Sh1.83 trillion between July 1, 2022

and February 28, 2023. Out of this, Ksh727 billion (40 percent) was used on recurrent

expenditure and Ksh694 billion (38 percent) on public debt.

With the 2014 Eurobond maturing in 2024, the Kenyan government will be expected to fork out

USD 2 billion which will push up external debt servicing costs and cause further distress. The

delayed salaries in March 2023 may be a harbinger of doom and gloom in 2024.

Incidentally, 30 years ago, Kenya was also in the middle of economic upheaval. On the

recommendation of the Bretton Woods institutions, Kenya initiated Structural Adjustment

Programmes (SAPS) that among other things led to massive retrenchments in the civil service.

Will history repeat itself?