The four men who could make or break the Ruto government
Wednesday 28 September 2022
Four nominated cabinet secretaries, including former central bank governor Njuguna Ndung’u, will emerge as key cogs in the new government’s struggle to cope with a heavy debt burden, rising living costs and drought.
Key candidates for Agriculture (Mithika Linturi), Cooperatives and SMEs (Simon Chelugui) and Energy and Oil (Davis Chirchir) will make or break President William Ruto’s new government.
dr Ruto was sworn into office this month after a hard-fought campaign in which he pledged to create economic opportunity for the poor.
But he faces very tight fiscal space to implement his policies after his predecessor Uhuru Kenyatta’s government increased public borrowing to finance infrastructure projects.
Now, however, all eyes will be on Prof Ndung’u, who is overseeing Ruto’s key economic commitments, including a plan to invest at least Sh500 billion in agriculture and small businesses over a five-year period.
The former CBK governor is expected to lower the cost of living, address rising supplier debt and address the burgeoning national debt – which now eats up over 60 percent of tax revenue, up from 12 percent in 2013.
He will need to develop a productive relationship with Mr Linturi, Mr Chirchir and Mr Chelugui to boost food production, cut food costs, lower fuel and electricity prices and invest in small businesses to boost job creation through the so-called ” Hustler Fund”.
The Hustler Fund will provide government-backed concessionary loans to small businesses struggling to access financing from mainstream banks.
The Shilling 250 billion fund will be at the heart of President Ruto’s job creation agenda, especially as the outgoing government extends the hiring freeze at semi-state-owned companies, dashed the hopes of thousands of unemployed Kenyans in an economy where corporations are creating jobs break down.
Mr. Chelugui will manage the fund. Mr. Chirchir will be at the center of a decision on fuel subsidies
partially scrapped this month, which could lead to upward pressure on inflation.
President Ruto said subsidies are not sustainable.
Analysts said it was likely the new hikes would push inflation even higher from a five-year high of 8.5 percent in August.
But Mr. Chirchir, a close ally of the president who is returning to the energy list, is expected to deliver cheap fuel and electricity, which hit record prices this month.
“We are aware that we are in a difficult economic situation,” said President Ruto yesterday when presenting his cabinet.
He urged parliament to quickly approve his nominees so the government can start working on the economy.
Candidates will go through confirmation hearings in the National Assembly, where MPs will review them and either reject or support them before they can be sworn into office.
dr Ruto also appointed former finance minister Musalia Mudavadi as prime minister of the cabinet in a revision that retained only one of former President Kenyatta’s ministers, Mr Chelugui.
Mr. Mudavadi will be the longest-serving member of the Ruto administration, after President and Vice-President Rigathi Gachagua.
Of the 22 nominated ministers, seven were women, meeting the constitutional requirement that one sex should not dominate more than two-thirds of state jobs, but trailed behind Dr. Ruto’s campaign pledge that women should make up half of his cabinet.
Prof. Ndung’u served as Governor of the Central Bank of Kenya from 2007 to 2015 before being appointed Executive Director of the African Economic Research Consortium in 2018. He holds a PhD in economics from the University of Gothenburg, Sweden.
He was praised for leading the expansion of the financial sector but was criticized for prioritizing growth over price stability in 2011.
The former governor weathered a political storm in 2012 when Parliament tried to oust him over the previous year’s currency turmoil, when the shilling weakened sharply and inflation soared.
A Reuters poll ranked him as the worst-performing African politician after the shilling fell to its weakest on record while inflation soared.
He redeemed his reputation as a central banker in the years that followed by containing inflation after raising interest rates before gradually stabilizing them.
Current central bank governor Patrick Njoroge’s term is expected to end in June next year.
under dr Ruto’s predecessor, who invested heavily in new rail links and other infrastructure, saw Kenya’s debt more than quadruple to Sh8.58 trillion.
The increase in liabilities has put the country at high risk of a debt crisis, according to the International Monetary Fund.
Inflation is currently 8.5 per cent above the state’s 7.5 per cent ceiling on taxes, low food production and expensive imports, while 5.7 per cent of Kenya’s labor force was unemployed in 2021 – almost double the East African average .
This underlines Prof. Ndung’u’s full inbox.
Food inflation is currently at 15.3 percent and the government hopes to boost production to lower market prices.
The Ruto cabinet has rewarded its backyard Rift Valley and Mount Kenya with 55 percent of cabinet posts, or 12 positions, with the latter region, where his deputy hails, commanding the lion’s share with seven cabinet posts.
The western region has three cabinet seats, while the Nyanza, East, and Coast regions have two seats each. North Eastern has one position.