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Is Kenya poised for an economic takeoff? Or is the prospect more hype than reality?
It’s a question I wrestled with during a recent, too-brief trip to the country where I lived in the 1990s.
President William Ruto, Kenya’s self-styled “hustler in chief,” tells anyone who will listen that his East African country of about 55 million people is “open for business.” He has plenty of backers, including many Western economists, bankers and the top U.S. diplomat in Nairobi, who agree that Kenya — East Africa’s largest economy and by far its most stable democracy — might finally be ready for its breakout moment after decades of stagnation, autocratic repression and ethnic strife.
The boosters point to the country’s impressive 5.5 percent growth rate last year, expected to top 6.3 percent for 2024. Its young population — the median age is just 20 — is one of the continent’s best educated. The workforce is growing while the overall population declines, leading to what economists call a “demographic dividend,” the sweet spot in which more working-age people have fewer mouths to feed.
Kenyans have also embraced technology. The country has high digital penetration, is awash in start-ups, and was one of the world’s earliest adapters to cellphone banking; some 98 percent of Kenyans now use mobile money. It is also one of the world’s most environmentally friendly countries — 93 percent of its energy comes from renewable sources, solar, wind and geothermal.
Kenya’s democracy, too, has entered a more mature phase. After ridding itself of the corrupt dictatorship of Daniel arap Moi, who held power for 24 years and stoked ethnic tensions, Kenyans overwhelmingly voted in 2010 for a new constitution, touted as a “second republic” that contained the country’s first citizens’ bill of rights, clipped the powers of the presidency and made parliament more representative (including with more women).
“A sleeping giant” is how two different Western economists described Kenya to me. “There’s something happening here,” U.S. Ambassador Meg Whitman said last summer in a speech to business leaders.
But beyond the hype, some of the old familiar problems persist, as most of the Kenyans I met pointed out.
Most insidious is corruption. It remains rife — some say out of control — from the lowest levels of government to the highest.
On the congested streets of Nairobi, Kenya’s capital, police officers looking for a few shillings in bribes pull over motorists. Basic government services come with an under-the-table fee. Last month, the Daily Nation newspaper ran a front-page survey under the headline “A nation of bribes” that listed the average size of bribes paid for 10 basic services. A business permit was listed as nearly $60. A new passport can be had for a whopping $570.
Digitization is supposed to help combat corruption. For example, making traffic fines, taxes and licensing fees payable online can eliminate outstretched palms. But even optimists concede this is an uphill battle. U.S. Trade Representative Katherine Tai warned recently that corruption in government contracting was hampering efforts to attract more U.S. investment.
And Kenya’s infrastructure remains subpar. The oldest terminal at Nairobi’s Jomo Kenyatta International Airport looks as rundown as it did two decades ago. A new Chinese-built expressway can whisk you quickly from the airport to the city, but most Kenyans want to avoid the toll of about $3 — because the average daily wage is about $6.
More than 5 million people live in Nairobi, and the city’s center feels as though it’s bursting at the seams. Some 80 percent of Nairobi’s roads have no sidewalks, leaving throngs of pedestrians to jostle with private cars, motorcycles, trucks and buses at peak hours.
About 7.8 percent of Kenyans — nearly 9 million people, mostly in rural areas — live in extreme poverty, and the gap between the wealthiest and the rest is widening.
In assessing Kenya’s prospects, I come down somewhere in the middle, optimistic but cautious.
Kenya gets graded on a curve because it resides in a tough neighborhood — bordering Somalia, Ethiopia and South Sudan, with Sudan close by.
Yet a lot of good things are happening. There’s a more vibrant — dare I say hopeful? — feel, a certain buzz in Nairobi that was missing during the Moi years. There’s a free and vibrant press; despite corruption, the media, including a proliferation of online blogs, exposes it and names and shames the perpetrators. Kenya’s judiciary also jealously guards its independence.
The new constitution also devolved more power to the 47 counties, something my old friend, lawyer and human rights activist Gitobu Imanyara — no fan of Ruto — conceded was “a fantastic development, very transformative.” Instead of a single, all-powerful leader in Nairobi, devolution has dispersed power among 47 “mini-presidents,” many of them unaligned independents and several women.
Perhaps more important, Imanyara told me, Kenyans are now more attuned to their rights. “The rule of law has taken root,” he said. “Kenyans, having tasted the fruits of the second liberation, are no longer going to accept a dictatorship like in Moi’s time.”
Kenyans now feel free to speak their minds — including criticizing the president — without fear of reprisal. This is a huge change. Imanyara chuckled, “I can talk to you without having to look outside.”
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