To explain extravagant 2017 poll campaign, just follow the money

Jubilee leaders dance at Safaricom Stadium Kasarani on September 10, 2016 after the launch of Jubilee Party. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

What you need to know:

  • The two recent mega rallies to celebrate the launch of the Jubilee Party in Nairobi and ODM’s 10th anniversary in Mombasa were resplendent with pomp and colour and must have cost a small fortune.
  • Deputy President William Ruto was recently reported to have contributed Sh18 million in two days alone to different projects.
  • The recent capping of interest rates is helping drive down borrowing and new loans.

The coming elections are certain to be among the most competitive and fiercely fought in Kenya’s history of multiparty politics. This is a healthy and welcome development.

The two recent mega rallies to celebrate the launch of the Jubilee Party in Nairobi and ODM’s 10th anniversary in Mombasa were resplendent with pomp and colour and must have cost a small fortune.

Deputy President William Ruto was recently reported to have contributed Sh18 million in two days alone to different projects. Pictures of the eye-catching Cord cavalcade have adorned the media. Stories about who is using what type of helicopter or helicopters and the hiring cost per hour, if the aircraft is not owned, have featured prominently.

However, it is not just a question of the vast volumes of money being spent or donated. For many, the big and pertinent question is where all this cash is coming from.

It is useful to go back to the return of multiparty politics in 1992. One of the main weapons the incumbent, Kanu, used was to allow the Central Bank of Kenya to increase money supply, which the party used to fund its campaign.

Much of the money was channelled through such amorphous setups as the Youth for Kanu ’92 lobby group. The amount of money put out in the second half of 1992 resulted in the derailing of the Kenyan economy.

That crude and simple method is, thankfully, no longer an option. Indeed, overall money supply has declined to its lowest level since 2009.

This also reduces the likelihood of another avenue of potential election funding, which is bank borrowing. Private sector credit has shrunk to the extent that the CBK base rate has actually been reduced.

The recent capping of interest rates is helping drive down borrowing and new loans.

OVERPRICING GOODS

What about government coffers? Anyone conversant with day-to-day government operations and payments will know that it has little leeway to dish out much else than the bare bones of its budget.

In this new fiscal year, the government has already borrowed Sh103.5 billion against a projected Sh66.2 billion. Its operations are strapped for cash and payments are erratic and often delayed.

Yes, there is the likelihood of diversion or overpricing of goods and services, but that is arguably a limited avenue.

So, where then is the balance of the money coming from?

It is easy to trace where some of the main money emanates from. Uhuru Kenyatta’s, and in turn the Jubilee’s, campaign undoubtedly has substantial family money behind it. Raila Odinga’s campaign has a lot of support from abroad and the Kenyan diaspora.

When it comes to individual candidates’ campaigns they are likely to learn early that they will need to rely pretty heavily on their own resources and assets and the generosity of their backers and supporters.

What is evident also is that individuals tend to get squeezed into contributing in one way or another. Many in Mombasa certainly felt this way when the Cord rally came to town.

This will certainly be the most expensive and intense campaign ever and, depending on the election date, could be quite a lengthy one. There still appears to be a large gap between how much money this campaign will gobble up and where the balance of the supply will come from.

While one cannot give definitive figures, one should look in the direction of the money lost or unaccounted for through the likes of the mega NYS stable of scams and overpriced schemes such as the single gauge railway.

When added up, there is a stack of money out there paid out to or borrowed for these scams and overpriced projects.

What else, apart from these calculated guesstimates? Proceeds from rent seeking and general racketeering, drugs included, are two more.

There will be some who will argue that much of this is speculative talk without substance. The blunt retort to that is that there is a lot of unaccounted for money coming in and it is not just dropping from the sky.

Mr Shaw is a public policy and economic analyst. [email protected]