Thursday Special: Mwiraria’s Resignation: What It Means

At the height of the Robert Ouko murder crisis in 1991, pressure had mounted on the government, especially with the naming of the then cabinet minister Nicholas Biwott as one of the key suspects of the gruesome murder.

Moi made his move and sacked the man many saw as his closest ally. Even Biwott himself had not been aware and when confronted by reporters (at the airport on his return from a foreign trip), he could not hide his surprise at what appeared to be news to him. Biwott was later picked up by police for questioning, together with the late Hezekiah Oyugi (then PS incharge of internal security).

It worked. The tension was instantly diffused and President Moi got the breathing space he required for reorganizing his troops.

Fast forward to the present.

Yesterday, as pressure mounted on the President to do something about Anglo Leasing, something even more than the unprecedented questioning of a sitting VP over corruption allegations, he finally made his move and one of his closest allies, Finance Minister David Mwiraria resigned to pave way for investigations.

It is instructive that just the day before reporters had been treated to vintage Mwiraria.

The wild allegations of Anglo leasing in the Nation report had said nothing new, Mwiraria confidently said.

What about the threat by the World Bank to freeze Aid to Kenya, another reporter asked? Mwiraria did not seem to see anything major about that – the journalists were so surprised at this response that it ended up being the headline on that story in the Standard newspaper.

As a parting shot, Mwiraria promised to issue a more comprehensive report next week. He could not have known at that time that less than 24 hours later he would call a press conference to announce his resignation. The former Finance Minister said something else very telling. He said that the President had accepted his resignation.

Here’s a quick quiz for you. What does it usually mean in the corporate world when a person resigns and you hear immediately that the MD has accepted his resignation?

Answer: To save his face, instead of firing him, the MD asked him to resign. He then quickly accepts his resignation.

Now that we have cleared all the doubts as to where that decision came from, the big question is will it have the same effect as the sacking of Nicholas Biwott in 1991? Because, make no mistake about it, that is the intention here. This is politics.

In my opinion the answer is “No”.

Why? I hear you ask.

Here is my list of reasons;

1) In a damage control move like this one, execution is extremely critical. Moi may not have seen the inside of a university but the old man understood execution so well, he used to supervise it himself. Bearing in mind the track record of this government, the execution of this whole strategy is bound to be wanting. In fact already it has started on the wrong footing. The President should have fired the Finance Minister (preferably in the 1 pm news bulletin for effect). Doing it the corporate way just sends the wrong signals. The result will be that it could easily have the very opposite effect of what was intended.
2) If you must eat a frog, choose a fat juicy one. Old Ibo proverb or something. Sacking one minister, even your finance minister is not enough, given the current circumstances. The President should have fired 2 or 3 ministers in one swift move. Or a minister and (the poor scape-goat) VP. That coupled with good execution would have had a better chance of success.


Will The Real Finance Minister Please Stand Up

Those who witnessed President Kibaki’s tenure as Minister of Finance over a period that mostly straddled the booming 70s, will have recognized the President’s personal hand in many of the recent policies and moves at treasury.

For instance Finance Minister, Kibaki used low interest rates to make a major impact on industrial growth with a very positive impact job creation in the 70s. The same policy has been applied by this government. Some people say it has had an impact. The man on the street does not agree, my gut feeling is that the sum effect has been negative because other policies of the same government have quickly cancelled out any gains that would have accrued. And anyway, the rates have steadily been climbing right up again.

The truth is that the real Finance Minister, in terms of policy anyway, has been the President himself. So investors and the business community should not expect any major changes in policy at Treasury.

Mwiraria Resigns: Kenyan Finance Minister Resigns Over Anglo Leasing

BREAKING NEWS...

In a major development on the controversial Anglo-leasing scandal, Kenyan Finance Minister David Mwiraria has resigned today to pave way for investigations. It is not the nature of this blog to break news, but this is an important new development that we are already analyzing.

David Mwiraria is one of the closest and longest serving allies of President Kibaki. The former minister said he was resigning to pave way for investigations. President Kibaki is said to have accepted the resignation.

This is historical because Kenyan Ministers never resign, whatever the scandal whatever the circumstances. Mwiraria is the first cabinet Minister to resign since 1991. Ironically it was Kibaki himself who resigned on Christmas day that year while in Mombasa on holiday, to form his DP political party.

However it remains to be seen whether this is simply a move to diffuse the mounting pressure on the government over Anglo leasing or a tactic borrowed from former President Moi (see yesterday’s post).

This blog will carry a full analysis of this new development tomorrow.

P.S. It is very significant to note that just yesterday Mwirari dismissed the Anglo Leasing report and said he would issue a comprehensive statement to the press next week after studying the allegations in more detail... Something changed in the few hours between yesterday and today.

At the same press conference yesterday, Mwiraria scoffed at the World Bank Threat to cut off aid to Kenya.