Kenya Opposition Takes Aim at Graft, Poverty in Election Bid

(Bloomberg) -- Kenya’s opposition alliance said it will crack down on corruption and rein in government spending and borrowing if it unseats President Uhuru Kenyatta in August elections.

The National Super Alliance would fight graft by dismantling cartels that it says have “captured the state,” according to its manifesto for the Aug. 8 vote, released Tuesday. The five-party coalition, which backs former Prime Minister Raila Odinga for president, also said its government would revitalize industry, run a budget deficit that doesn’t exceed 3 percent of gross domestic product and introduce a fairer tax regime while boosting revenue collection.

While current growth is “respectable,” it’s not anchored by productivity but “fueled by profligate procurement-led government spending,” the alliance said. “The average Kenyan is not experiencing improvement in their standard of living” and “many people now doubt whether this growth is real.”

Elections in Kenya, East Africa’s biggest economy, heighten investor concern because of violence that engulfed the nation in three of the past five votes. In a disputed December 2007 vote, ethnic violence left 1,100 people dead and forced 350,000 more to flee their homes. The unrest caused economic growth to slow to 1.7 percent in 2008 from 7.1 percent a year earlier.

The Kenyatta administration’s “mismanagement” of public finances and use of expensive, short-term commercial loans to plug the deficit place Kenya on a “debt treadmill,” the alliance said. Kenya’s total debt stock was 4.05 trillion shillings ($39.2 billion) in the year to March, according to Treasury data. The budget deficit may narrow to between 6 and 6.5 percent in 2017 from around 9 percent in 2016, Treasury Secretary Henry Rotich said that month.

Growth Target

The opposition said it will target annual GDP growth of 10 percent over the next five years, review taxes on small businesses “with a view to reducing them” and allocate 45 percent of state funds to the nation’s 47 counties.

Kenya could borrow responsibly to get the economy out of a “permanent” mode of debt refinancing, the alliance said. “The precarious situation is not just a matter of the rapidly rising cost of servicing the debt but also the nature of the repayments.”

If elected, the alliance said it would also offer free secondary education at public schools and a tax-payer funded program to provide universal health care.

It also pledged to upgrade domestic airports, build more roads, and introduce a commuter-rail transport system at the country’s Indian Ocean coast and a mass-transport system in the capital, Nairobi, to help alleviate traffic congestion. Other promises include building 500,000 affordable housing units and increased mechanization of Kenya’s crucial agriculture sector.