President Ruto’s Economic Advisor David Ndii….Photo/Courtesy.
By Micah Sali.
NAIROBI,KENYA.
Presidential economic advisor David Ndii recently defended Kenya’s handling of inflation, boasting that the country’s current rate of 2.8% rivals those of the U.S., UK, and EU.
Speaking on Kenya’s economic recovery on X, Ndii drew a sharp comparison to Argentina, which reduced its hyperinflation from over 200% to 190%, remarking, “Who is to learn from who?” He touted Kenya’s success, noting that inflation had fallen from a moderate 10% to a low rate, making it comparable to global economic powerhouses.
But not everyone agrees with Ndii’s optimism.
Bungoma-based lawyer Hillary Chemao criticized the government’s economic claims, calling the situation “a far cry from a recovery.” Chemao warned that the economy remains fragile and that Kenyans, particularly the poor, continue to bear the brunt of government mismanagement.
“The economy is in limbo. It’s not rocket science to know that the government has a long way to go before stabilizing it,” Chemao said.
Inflation: A Silver Lining or a Mirage?
Kenya’s inflation rate of 2.8% is one of the lowest in East Africa, ahead of Uganda’s 4.9% and Tanzania’s 3.6%.
Yet, it’s important to contextualize this number against a backdrop of mounting fiscal struggles.
While inflation may appear under control, issues like unemployment, high cost of living, and poor service delivery paint a more troubling picture for many Kenyans.
South Africa’s inflation rate, at 5.4%, and Nigeria’s soaring 25%, further underscore the regional disparity.
The true challenge, according to experts, lies in Kenya’s fiscal governance.
Government expenditure has continued to outpace growth, with the Treasury struggling to meet its obligations to local governments.
As of late November, counties were owed KSh 31.45 billion, with delayed disbursements contributing to a slowdown in critical sectors like healthcare and infrastructure.
Argentina’s Economic Shock Therapy.
David Ndii’s comparison to Argentina is poignant, as the South American country is historically known as one of the world’s most mismanaged economies.
Argentina has faced repeated economic crises, with hyperinflation, sovereign debt defaults, and massive currency devaluation.
The country’s economic mismanagement has earned it a place alongside Zimbabwe and Venezuela as a cautionary tale for economic policy gone awry.
Yet, under President Javier Milei, Argentina has embraced “shock therapy” policies aimed at stabilizing its economy.
These drastic measures—cutting government spending, slashing subsidies, and freeing up the exchange rate—have triggered both support and backlash.
For those who seek more than just sensational headlines or propaganda, a deeper look reveals a complex picture of Milei’s reforms.
While some economists argue that the reforms are necessary to curb the decades of economic mismanagement, others fear the social cost of such rapid changes .
A Growing Mountain of Debt.
Among the counties facing the most severe challenges are Trans Nzoia, Kakamega, and Busia.
In Trans Nzoia, Governor George Natembeya is under pressure to clear more than KSh 1.5 billion in outstanding bills.
The delay stems from an ongoing audit of these bills, which has frustrated local suppliers and contractors.
In Kakamega, contractors and county employees are still waiting for payments that are months overdue, although the exact figures remain unclear.
Similarly, Busia County faces arrears of about KSh 692 million.
These financial strains are further compounded by salary delays in several counties, with employees facing up to three months of arrears.
In Bungoma, the county government is struggling with over KSh 1 billion in unpaid bills and wage delays.
Local workers, including those in the healthcare and education sectors, have expressed their discontent, staging protests over the financial hardships caused by the delays.
A Long Road Ahead.
Experts agree that Kenya’s economic future hinges on addressing these fiscal challenges.
Without reforms to ensure timely disbursement of devolved funds and resolve the issue of pending bills, the country risks further economic stagnation.
The government’s ability to manage its debt and maintain infrastructure development will be critical to restoring confidence in its leadership.
Hillary Chemao emphasized, “It’s not enough to tout reduced inflation when people cannot feed their families or receive proper healthcare because of delayed payments.”
As Kenya grapples with these persistent issues, 2025 will be a defining year for its economic trajectory.
The key question remains whether the government can stabilize the economy by tackling the structural challenges or if the rhetoric will remain disconnected from the realities faced by ordinary Kenyans.
Ends.
