Although challenges remain, recent reforms in Kenya likely to bring economic growth

Kenya has undergone a significant political and governance transformation over the last five years. New measures to encourage a more stable and democratic system have been ushered in, changing the way Kenyans are governed and how the different layers of administration interact. These structural alterations are good news for the country, although there are still challenges as it looks to maintain its growth and stability moving forward.

Political System

Kenya has operated as a republic with a bicameral parliament since independence. The lower house, the National Assembly, has 349 members, 290 of which are elected from the country’s constituencies. In addition, 47 women are elected from the counties and 12 members are appointed from party lists to represent special interests. The upper house, or Senate, has 67 members, 47 of which are elected from the 47 counties. The remaining 20 are nominated from their parties, 16 of whom are women. The executive branch consists of the president of the Republic, who can serve a maximum of two five-year terms, the deputy president and Cabinet secretaries.

The post-independence period has often been a turbulent one. The country’s first opposition party was banned in 1969 and the country was effectively run as a one-party state until the introduction of multiparty elections in 1991. Subsequent elections have been fraught with tension. In 2010 the constitution was amended in a bid to reduce gerrymandering and curb the power of the presidency. The most recent elections in 2013 passed off without violence, when the opposition presidential candidate Raila Odinga, who initially disputed the outcome, accepted the Supreme Court’s decision declaring the result valid.

Elections

The March 2013 elections were seen as an important step forward in the political life of the country. Following post-election violence in 2007, and the subsequent passage of a new constitution, the peaceful resolution of the most recent ballot points to a potentially more stable environment in the country going forward.

The 2013 elections brought to power three centrist parties. The National Assembly was divided between the Orange Democratic Movement, which won 96 seats; the National Alliance, which gained 89 seats; and the United Republic Party with 75 seats. The result was replicated in the Senate, where the Orange Democratic Movement and the National Alliance received 11 seats and the United Republic Party received 9. Uhuru Kenyatta, son of the republic’s first president, Jomo Kenyatta, won the presidential election with 50.07% of the vote. As he received more than half of all votes cast, he avoided a run off with his opponent, former Prime Minister Raila Odinga, who won 43.7% of the vote.

Sustainable Reforms

This outcome did not happen by accident. In addition to a strong public push for peaceful elections, a number of reforms were instituted to address the root causes of discontent in the wake of 2007. A new constitution approved by two-thirds of the population in a 2010 referendum helps check executive power by requiring the president to win more than 50% of the vote and receive broader geographical support. The new ruling document also enshrines devolved power with the establishment of new elected county governments. Other reforms include a new Independent Electoral and Boundaries Commission, to limit gerrymandering among other tasks, and the appointment of a new chief justice who can respond to electoral fraud and disputes.

Devolution

One of the most prominent reforms that have been put into place alongside and following the 2013 elections was articulated in chapter 11 of the governing document: devolution. For many Kenyans, the process of decentralisation is no more than an issue over the equitable distribution of resources in the country. Indeed, although the major urban centres are only home to approximately 25% of Kenya’s population, most of the wealth and quality public and private services are concentrated there. The capital, Nairobi, accounts for about 60% of the country’s GDP. But outside the cities, an agrarian way of life persists, with land mainly farmed on a subsistence or semi-commercial basis. As much as 90% of the food produced in the country comes from smallholders.

Moreover, it is not just in terms of production and wealth that the centre has dominated. There is a great disparity in social services between rural and urban areas, a situation that leads to widely divergent outcomes in terms of educational attainment, job prospects, and quality and length of life. This can be seen clearly in the country’s health care system. Outside the main centres, there are massive staffing shortages in health care facilities.

According to Transparency International, in some rural areas staffing provision may only reach 20% of requirements. It is hardly surprising then that Kenyans in the periphery often have to go without critical health care services.

According to the World Bank, in Kirinyaga County in the centre of the country, 80% of infants are delivered in a formal health care facility. In the remote Wajir County, on the other hand, only 5% of infants receive this level of care. The move towards devolution should go some way towards remedying these inequities. Under the new governance structure, county governments will have greater control over budgets and investment decisions affecting their areas. Capital can be directed towards social infrastructure, such as new primary care facilities or educational institutions (see Health chapter).

This will not only mean better quality education and better health outcomes, but also that the flight of young people to the capital or other urban areas can perhaps be slowed.

The Framework

The newly devolved system was put in place in 2012. The eight provinces were replaced with 47 counties acting as the second tier of government. These new political units are represented by an elected county assembly and county executive with considerable local power.

The new bodies, which held their first elections in 2013, have responsibility for health care, pre-primary education, the upkeep of roads, and the maintenance of local administration. They also have the power to levy taxes and fees. Funding for this new layer of local governance is determined by a county’s size, in terms of both population and area, and its level of poverty. The poorest counties receive priority. To maintain good governance standards, the National Treasury has oversight of local spending, ensuring that counties adhere to local spending plans and development goals. While the national government ensures fiscal responsibility at the local level, county governments have autonomy over the design and details of the plans.

Teething

These dramatic changes in governance have not been without their teething troubles. In the health care sector, for example, county governors are already complaining about overreach from the central government, asserting that Nairobi has failed to consult them on the KSh38bn ($418m) national modernisation programme for the sector.

There are also concerns over increased bureaucracy and fiscal burdens. In the hospitality industry, for example, struggling tourism businesses along Kenya’s coast have complained about a $5 monthly bed tax and a $40 monthly tourist vehicle tax imposed by Mombasa County.

Improving Security

The government has had a full agenda in recent years, looking to stimulate economic growth, roll out major governance reforms, and strengthen Kenya’s diplomatic and trade clout in the region. At the same time, one of the more prominent priorities has been tackling the security situation in the country – which was unfortunately highlighted most recently by the April 2015 attack by Somali terrorist group Al Shabaab on a university in Garissa, and the 2013 attack on the Westgate Mall in Nairobi.

As a result, the Kenyatta administration has taken a robust approach to address security issues. The Kenyan Defence Force (KDF) moved into southern Somalia in 2011 in an attempt to create a buffer zone along the border and a safe haven for Somali refugees residing in camps in the ethnic Somali north-east of Kenya to return to their country. The efforts have been part of a wider international mission. The KDF joined the African Union Mission in Somalia in early 2012. By some measures, the Kenyan strategy has been a success. Al Shabaab has been pushed back in southern Somalia, losing access to its last port in March 2015. As such, it has been hemmed in and surrounded by the KDF and regional forces in the south of the country.

To address potential spill-over, the government has begun working to strengthen border controls, including a plan for a concrete wall and fence along the border with the southern Kenyan-occupied Somali state of Jubaland. Construction on the 700-km series of CCTV-monitored walls, fences, ditches and observation posts began in April 2015. While initially hoped to be completed by the end of the year, work has been delayed due to a pay dispute, and a new completion date not been set. The official cost of construction is $260m.

Cleaning Up

The Kenyatta administration has also recently increased its efforts to tackle a range of good governance issues from money laundering and terrorist financing to the training of government officials and the prosecution of corrupt acts. As with many emerging markets around the world, corruption has been a challenge. Released in July 2015, the report of Edward Ouko, the auditor general, said that only 1.2% of Kenya’s KSh1trn ($11bn) 2013-14 budget “was incurred lawfully and in an effective way”. As much as 60% of government spending “had issues”, while a further KSh390bn ($4.3bn) could not be accounted for.

As a result, Kenya has committed to joining the Egmont Group, an international gathering of financial intelligence units, as well as sign up to and implement the Extractive Industries Transparency Initiatives, the Partnership on Illicit Finance and the Financial Action Taskforce of the World Bank. Other measures include an anti-corruption cooperation programme with the US to reinforce the Financial Reporting Centre and the central bank’s abilities to track and monitor illicit cash flows, compulsory ethics training for all public officials, and the professional prosecution of corruption cases.

John Moore, director of programmes for the Sudans and the Great Lakes at the Rift Valley Institute, told OBG, “Kenyatta and his political machine have probably been better than any administration before at delivering the message of a tougher stance on corruption. The suspension of Cabinet ministers earlier this year and the bringing to parliament of the ‘List of Shame’ last year were a bold steps ... [but] prosecutions must now follow.”

The early signs are potentially encouraging. In October 2015, for example, two senior agents from the Kenya Revenue Authority were arrested by officers from the Ethics and Anti-Corruption Commission (EACC) for allegedly demanding bribes from a tourism business. This was followed by the arrest of three traffic police officers for alleged corrupt practices in a sting operation by the EACC.

Independent Judiciary

Central to these efforts is the country’s independent judiciary, which is modelled on the British common law system. Following the implementation of the new constitution, the system was changed. It consists of the Supreme Court as the apex body, with seven justices presiding, along with the lower courts including an appellate body known as the Court of Appeal, the High Court and a range of magistrate and religious Islamic courts.

The judges for the Supreme Court are nominated by the Judicial Service Commission and appointed by the president, pending approval by a majority vote of the National Assembly. The justices are allowed to serve until the age of 70. The chief justice serves a 10-year term.

Consisting of a minimum of 12 judges, the Court of Appeal hears matters that have already come before the High Court and have been appealed. The High Court has unlimited jurisdiction in civil and criminal matters, the exception being cases involving the constitution and presidential election. Islamic courts, known as Kadhi courts, are composed of three judges and are allowed limited family jurisdiction when both parties are Muslim and voluntarily submit to Kadhi jurisdiction.

The Judicial Service Commission set up a new body within the High Court to focus on transnational issues, such as money laundering, piracy, human trafficking and organised crime in 2012. Known as the International Crimes Division, the seven-judge court’s responsibilities also include investigating low- and mid-level cases stemming from the post-election violence of 2007 and 2008.

Outlook

As the country reaches the middle of President Kenyatta’s first term, his administration faces a number of challenges. Building faith in the political system, improving the security situation and dealing with endemic graft will occupy much of its time. They are difficult, long-standing issues, but the country is beginning to face them. If they can be overcome, Kenya will be well placed to ensure sustained economic growth and stability.

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The Report: Kenya 2016

The Guide

Table of Content

Country Profile chapter from The Report: Kenya 2016

Country Profile chapter from The Guide

Country Profile chapter from Table of Content