County Kenya - making your county viable

I see counties working only if they tick 4 boxes:

Financial control:

The world over local governance fails because for a whole host of reasons they spend more than they get from central govt or can collect locally. As of now, I'm aware of any financially solvent municipal or city council in Kenya. Its not Kenyan either. In the US, very few states are able to balance their books. In Kenya, the chief issue is not corruption but lack of financial control. Corruption is a by-product of this. Add politics and the cocktail is potent. Apart from the kind of auditing that is being done on CDFs, the second part has to come from the locals themselves. Seek accountability from your county by electing men/women of integrity and professionalism. Ksh2bn can look like a lot of cash but if your county has 1m population that is only Ksh2k each. Its not cash to be pilfered but to put into projects that will generate returns. Proper accounting, budgeting, project management and procurement processes will seal loopholes. Although, new Katiba doesn't have it, I expect some revenue raising powers for counties eventually. In any case, revenue and job creation measures will become a key differentiator between viable and non-viable counties. Hence,

Industrial base:

Nairobi has grown chiefly because its a magnet for most of the Kenyan brains. And many others. Counties without any employment prospects will become a mere curiosity. A grounded industrial policy should be one of the things each governor should be judged on. Measures to attract some of the industries currently congested in Nai's industrial should be looked at. Counties should consider setting aside 25% of their revenue to attract prospective employers be it via soft loans or even infrastructure development. While industrial development should be pegged on comparative advantages e.g. its no point Turkana setting a tea factory; certain counties may need to create the comparative advantages. As an example, Laikipia can look to set a meat processing concern or even look to aggressively market its tourism potential which is huge (Mt Kenya, Bantu lodge, Solio lunch, Samburu traditional homes etc). Others like Eldoret must look to turn the nearby Moi University into a R&D assembly point where students can come to study and build their lives as they become part of the next Silicon valley and so forth. No industrial base will really take off without...

Infrastructure:

Many counties have basic infrastructure. A touch of tarmac here; a few homes with electricity; very basic health centres. If a county is planning to become the next base for manufacturing of agricultural produce and other value-adding activities, it'll need power either from the national grid or by supporting solar energy collection. It may need a working airstrip or even airport to either transport produce to JKIA for onward transmission or direct to export markets. Roads will have to be good even for non-perishable produce as bad roads increase fuel costs. Its not just hard infrastructure, soft infrastructure in form of promoting R&D to locate to your county will create the brainpower to attract the employers that are needed. Upgrading and increasing the number of secondary schools (provide subsidised internet); technical schools supporting industries; universities will create a virtuous circle. Planning will also make a difference. Nyeri has had the same buildings and streets since I can remember i.e. late 80s, but also seems like many other towns to have sprang up a slum or two.

Minimise impact of politics:

Unless we get any external influences, competitive politics are here to stay. If Kenyans can't understand or won't play by the rules of such competitions, we'll have bloodshed or the kind of tension we had between 2005-8. Eventually, you find the economy goes backward as ours did in 2008-9 period. County govts that fall prey to negative politics will become like in the council of Nai or even Momba where nothing really progresses because the political animals can't see the big picture. How do you minimise negative politics? This comes back to the local county people electing men and women of integrity. It doesn't matter what you want as a county dweller, if you vote for the guy who builds up your party or pays out most, he'll need to recoup that outlay or party line up. Secondly, CDFs seem to have elicited more involvement by constituents in their affairs and this level of involvement will need to be there for county governance to work. Finally, the foundations and the future of your county will be laid by the first county government in 2012. Electing the right leaders; having succinct katiba provisions for counties and central govt involvement (via annual audits) will ensure that strong county institutions are in place to ameliorate politics.

In short, County governance is here to stay. If it can build on the positive aspects of the CDF experience, it'll take Kenya places.

2012 and beyond: US/Swiss model or the Nigeria one

The more I reflect on Kenya's history, the more I realise that how we are governed will be the key differentiator on whether we achieve our potential or not. The new katiba has given Kenya a potentially life-saving form of governance but only if its implemented to the letter. Below I review some of the new facets and their implications.

The 2012 general election will usher in

• an executive where only the president and his pre-nominated vp will be elected officials. The rest will be appointees from outside the political circle who will be vetted by the various parliamentary committees. This will work if you have a president who wants technocrats that can deliver in the particular ministry. The US model almost works but don't forget you can get guys like Donald Rumsifield. If done properly, we'll get a John Michuki-type in every ministry.
• County governance. This is new but it means that a lot of the current MPs will actually prefer being governors and senators than MPs. A positive because it means that we'll have a new crop of MPs. The downside is that your current MP might be angling to eat his cut of the 15% from the budget. In this respect, lets pray we don't get the dysfunctional Nigerian model but the super uber efficient Swiss one. Already in Nyeri, Elephant Maina is eyeing the governor seat to consolidate the horrible road he did in the area. Do you think any other road contractor will build roads there?

Yes? No? the katiba referendum summary

If you:

Want to be able to recall your MP for non-performance. vote YES

Believe MPs should set their pay. vote NO

Want land policy removed from president's control with size set being set by parliament. vote YES

Believe current land policy is good and its good president has veto on who gets land. vote NO

Want an independent judiciary. vote YES

Believe the president should continue appointing favorable judges without veto. vote NO

Want Kadhi courts not to be GoK funded, but think Christians can get 1m signatures to amend. vote YES

Believe Kadhi courts (a) will cease to exist (b) are the most important item in the katiba. vote NO

Want president's appointments to be vetted and veto'd by parliament. vote YES

Believe president should have the right to appoint who he pleases. vote NO

Want an independent central bank able to impartially supervise the financial industry. vote YES

Believe that the president and his finance minister know the banking industry best. vote NO

Want a semi-centralised governance able to take local development decisions. vote YES

Believe a majimbo system that appreciate regional tribes is the missing development piece. vote No

Want an anti-abortion law that recognises that special urgent situations for mothers' lives can occur. vote YES

Believe that there is an anti-abortion law that can stop abortions occurring in Kenya. vote NO

Believe current katiba is better than the proposed one. vote NO

Want a katiba that is superior to current one and reduces chances of dictatorship. vote YES

Want a constitution that recognises that its impossible to get all Kenyans saying yes. vote YES

Believe a katiba ain't a katiba until all voters agree its the business. vote NO

Will forthcoming Katiba referendum impact NSE?

By and large, business loathes uncertainty no matter what the source. As do the investors who invest in such businesses. There is logic to this. A business will normally plan and target certain revenue and cost outcomes for the year or for multi-years. These will be primarily be based on it being able to sell as much of its product and services as possible while keeping the costs down. While there will be some scenario testing it will not usually include the impact of PEV or continued tense politicking.

Kenya has spent 47 years under one katiba and its not gotten us far from 1963 apart from population-wise. A large part of this is because we didn't know what we know today about governance. This katiba is the sum of our learnings over those 47 years. For 20 years we've seeked to agree what these are and now we have a document that summarises them. To continue dwelling on this is sheer waste given the other pressing needs that we have.

A Yes vote will bring closure to the yearning for a new form of governance. It'll mean that we have a katiba that takes us forward for another 47 years. It is not a static document i.e. it is amendable. 2012 general election will be held under new rules that we understand

A No vote will may condemn us to another 20 years of continuous search because we'll effectively have taken the energy out of a new katiba. A No vote will mean that 2012 is approached with apprehension. The issues which would make us vote No are not even small print but a symptomatic of a minority that refuses to see the woods for the trees. A No vote will mean that NSE definitely factors-in a fractious 2012 general election.

For all the above, its advisable to hold cash that will allow you to take advantage of some low priced stocks or average down.

Proposed constitution: A review

Basically, this document is idiot-proof. Anybody can read this katiba and understand what each article says without needing an expensive lawyer or re-reading it severally.

Parliament:

Set parliament periods. Elections will be held on the 2nd Tuesday of August every 5 years.

Parliamentary Service Commission's composition continues to nag at me. i think its too MP-heavy and renders itself to their undue influence.

The MP recall clause- is in, but its not i.e. parliament has been given permission to come up with a law setting out the requisite criteria and procedure. However, article 105 does allow one to take a petition to high court against your MP basically declaring his seat vacant. And petition will be heard within 6 months.

Executive:

President has to seek parliamentary approval when appointing his/er Cabinet (now known as Cabinet Secrtaries), AG, Secretary to Cabinet, Principal secretaries, ambassadors , Cheif Justice and his/er deputy and ANOTHER.

Has to wait for 7 days after the elections before s/he is actually sworn into office (no more midnight swearing shenanigans)

Cabinet ceiling set at 24. Not sure why there is a floor of 14.

Cabinet secretary can't be an MP.

Cabinet secretary can be dismissed by parliament via majority vote (Kimunya won't have to die and resurrect)

Kadhi courts deal with muslim matters. Imho, they shouldn't be part of the civil service, but having been around for 53 years, it'd sheer hypocrisy to say I'm voting NO because of them. I can wait until the katiba goes through and then wage war proper.

Economy:

Devolved government has made it into the katiba complete with revenue (set at a floor of 15% of GoK revenue) and own senate.

Better control of public finance via a pre-budget statement that will allow parliament committee to consult the public.

An independent CBK-very very important especially for banking supervision and monetary policy.

Other of note:

National police

Amendments can be done via parliament and popular initiative.

Land policy

Dual citizenship