African business, politics and lifestyle
Kenya’s new finance minister: Positioning for next election?
President Mwai Kibaki’s naming of a key ally, Uhuru Kenyatta, as his new finance minister to replace another supporter, Amos Kimunya, does not come as a surprise to some.
Kimunya, who stepped down last July after he was accused of corruption in the handling of the sale of a luxury hotel, has also returned to parliament — replacing Kenyatta as trade minister.
Kimunya was not reinstated even after he was cleared by an official enquiry into the controversial sale of the luxury Grand Regency Hotel in the capital.
The long wait for someone to fill the finance position suggested to some that Kibaki was not comfortable bringing his ally back, given his tainted name.
His appointment to the trade ministry could mean Kibaki did not want to lose him from the cabinet altogether, although some analysts say it was a move to save face.
Pundits also say Kibaki did not have much room to manoeuvre in picking Kenyatta. Many MPs who support the president are parliamentary neophytes without much experience in running a powerful ministry like the treasury.
But the wealthy Kenyatta is an old name in Kenyan politics. His father was an independence hero and the east African country’s first president.
Political analysts think Kibaki could be positioning key allies, such as Kenyatta and Kimunya, for a stab at the presidency in 2012.
Ironically, Kenyatta contested for the top job against Kibaki in 2002. But the finance ministry post will not be easy. Kenya macroeconomic indicators are weak — GDP growth in 2008 is estimated to have halved to 3.5 percent, compared with 7 percent in 2007, and annual inflation in December reached a staggering 27.7 percent.
The budget deficit is yawning and is expected to widen further as the government subsidises food costs for some 10 million Kenyans facing hunger.
The government also faces uncertainty financing its $12 billion budget for the current fiscal year after it was forced to cancel plans for a $500 million Eurobond because of the global economic woes.
This is further exacerbated by tighter revenue flows.
So even though Kibaki may have appointed Kenyatta with 2012 in mind, the difficult job of getting the economy to grow during a global recession might not endear the new finance minister to many in the poor country.
Has Kibaki made a good decision?