In Kenya, the cash is out. Money in circulation has reached a historic level. A phenomenon due in particular to election expenses. The Kenyan Parliament fears that this campaign is causing inflation.
Since last April, cash in circulation in Kenya has been at an all-time high. According to the Kenyan media, as well as the Parliament's Budget Committee, this phenomenon is likely to cause a financial collapse: according to various forecasts, inflation could increase by 32%.
Because if so much liquid is in circulation, it is not necessarily because the Kenyan economy is doing well. Last August, the Independent Electoral Commission (IEBC) proposed a cap on campaign spending for this year's general election.
However, the law was overwhelmingly rejected. So, in effect, the election campaign in Kenya has no budget limits. The 2017 campaign cost around a billion dollars, and it is estimated that more than 2 billion will be spent, in all, for the August 2022 elections.
An amount that more or less corresponds to the cash put into circulation since the beginning of the year. In 2021, Kenyan banks had recorded the highest threshold of currency in circulation: just over $31 million. In April 2022, $2,14 billion left Kenyan bank vaults — in Kenyan Shillings, but also in foreign currency.
The economic crisis is coming to an end, with some banks beginning to declare their insolvency.
Commercial banks in Kenya have capped dollar access to $5,000 per person/entity per day.
Do you know what this means to importers? To freedom to transact? To individual sovereignty?
The system is clearly not working! Unplug
— Rufas Kamau
(@RufasKe) June 16, 2022
Sponsorship, helicopters, bribes… bling-bling campaigns
Upcoming elections are likely to be costly… The financing of the presidential campaign alone, which pits Vice President William Ruto against the leader of the opposition – supported by President Uhuru Kenyatta – Raila Odinga, has already exceeded that of the first election of Barack Obama in the United States in 2012.
Since early June, the Kenyan Parliament's Budget Committee has estimated that "there is anecdotal evidence that as elections approach, there is a drastic increase in the money supply in the economy".
And to continue that “the Central Bank of Kenya should strengthen its surveillance mechanism to ensure monetary stability in order to contain possible inflationary pressures resulting from the increase in campaign expenditure”.
According to Al Jazeera, in 2020 alone, the helicopters used by Kenyan politicians increased from 67 to 325. On the side of Meta (the parent company of Facebook and Instagram among others), political sponsorship on social networks from Kenya exceeded, during the first quarter of 2022, its prior threshold of more than $200 million additional.
Some examples that show the opulence of the electoral campaign in Kenya. And the candidates, for the Parliament or the presidency, do not skimp on the massive purchase of the votes.
No limits… no audit!
For anti-corruption activist John Githongo, the Kenyan election campaign is turning into a “spending competition” which will inevitably undermine “the integrity of the country”. “Our last elections (2017, editor's note) cost nearly a billion dollars. Spending per voter is among the highest in the world. This time, unfortunately, we are heading in the same direction, in the midst of an economic crisis,” regrets Githongo.
However, for the former legislative candidate, the investigative journalist Boniface Mwangi, an audit of electoral expenses should be urgently imposed. “A public administration should be publicly audited. It starts with the elections,” said Mwangi, who accused William Ruto of the murder of a journalist in 2016. “Election campaign financing is secret, which means there will be illegality, there will be will have criminal behavior,” he laments.
However, as this scandal unfolds publicly, politicians on all sides continue to oppose the imposition of a campaign finance cap. The amendment to the election law proposed last August, rejected supposedly for "missing the 12-month deadline before the general election", provided for a threshold of $ 44 million in expenses for presidential candidates, and 3,7 million for parliamentarians (senators and deputies). An already high ceiling compared to the Kenyan minimum wage of 130 dollars...
Kenya is BROKE but its Politicians are Damn Rich.
— Chelimo Kibett (@kibettchelimo) March 7, 2018
Expensive vote buying
As a reminder, the elections of next August 9 in Kenya mark the end of the double mandate of Uhuru Kenyatta. The current Kenyan president is the son of the country's first head of state, Joromo Kenyatta. The president supports, this time, his nemesis Raila Odinga, himself the son of the first vice-president of the country, Oginga Odinga.
Opposite, we find Vice-President Willam Ruto, who says he wants to “free Kenyans from the yoke of political dynasties”. Ruto managed to rally 12 opposition parties behind him. And even if the two princes of Kenyan politics, opposite, have considerable funds from the presidential coalition Azimo La Umoja and the Jubilee party, Ruto is not to be pitied. The coalition of the vice-president, Kenya Kwanza, is supported by several football clubs, by the unions, and almost all the start-ups in the country. In Kenya, precisely, startups form a parallel economy, probably richer than the state.
The Ruto-Odinga duel, and their coalitions, is a competition where anything goes. And the two men fully assume the purchase of the votes. A strange paradigm. Meanwhile, while deploring possible electoral violence, the West continues to hail the "exemplary democracy" in Kenya.