Railanomics: The people's economist who never ruled

When Raila Odinga made the first attempt to be president in 1997, he sought to bring about a just society for Kenya, promising an economic revolution that would see Kenyans earn “a fair day’s pay for a fair day’s work”.

Across his five presidential campaigns, Raila’s economic vision prioritised equitable resource distribution and direct state support for the poor, while maintaining a focus on transformative infrastructure and industrial development.

During his last shot at the presidency in 2022, Raila promised double-digit economic growth as well as jobs, free education for all and universal healthcare. 

Analysts note that if it came down to delivery, he could have faced numerous hurdles due to budgetary constraints, unless he figured out how to grow the tax base. Observers also note that the proposals appeared populist and failed to demonstrate clear modalities of achieving his goals.

In the National Democratic Party’s manifesto in 1997, Raila pushed for devolved power and economic redressal. The same promise could be seen in the Azimio La Umoja’s manifesto in 2022, in which he detailed his commitment to the social protection agenda, with perhaps the most prominent of promises being the Sh6,000 monthly cash transfer to vulnerable Kenyans, a programme that he christened “Baba Care”. 

His seemingly welfarist approach was also paired with ambition for grand infrastructure development and reviving the manufacturing sector. 

Raila got a High School Diploma at Germany’s Herder Institute and later a Master of Science (mechanical engineering, plant production) from Magdeburg Technical School, also in Germany.

Railanomic factors

His stay in Germany was seen as having influenced his left-leaning views that fueled his brand of activism for increased democratic space in the 1980s, but also his fight against unfair taxes and an economist system that always seemed rigged against the poor.

“Railanomics was welfare-based, more like the Scandinavian model. We cannot rule out the influence of what he saw in communist East Germany. His lasting legacy was checking the excesses of the government, not just in politics but in the economy,” said XN Iraki, a Professor at the University of Nairobi’s Faculty of Business and Management Sciences, further posing, “Who shall take his mantle?” in checking the government.

In his push for a fair Kenya, Raila has been a thorn in the flesh of successive governments fighting for increased democratic space and economic freedoms, always pressing different administrations to reconsider taxes and ease the ost of living.

His stature in Kenyan politics, large following and being unafraid to lead from the front, even in protests, has always seen presidents bring him to their side, as seen with President William Ruto’s broad-based government, President Uhuru Kenyatta’s handshake and President Mwai Kibaki’s “nusu mkate” government of national unity, after the 2007 post-election violence.

In the government of national unity, Raila served as the Prime Minister, a co-principal to the President.

While his absence during last year’s Gen Z demonstrations, sparked by increasing taxes, particularly those proposed in the Finance Bill 2024, was noted, Raila has always protested the high taxes, corruption, high unemployment and generally, an unconducive business environment. 

In his 1997 manifesto, he noted that despite high levels of taxation, the government had failed to deliver on all fronts and would each year leave Kenyans poorer. 

Kenya reels from the effects of government-instigated inflation and the failure of the government to meet its financial obligations despite very heavy taxation. Mismanagement of the economy and corruption have had far-reaching effects on the incomes of farmers, businessmen and women, entrepreneurs, investors and all other workers in the populace,” reads part of the manifesto, which promised a fair tax policy that ensures that every citizen pays their fair share of taxes, but also incentives to investors in productive areas of the economy.

“Despite the high levels of taxation at all points of implementation, there are no corresponding signs of infrastructural and social development. Taxpayers’ money is looted, while patronage ensures the culprits evade taxation.”

Iraki noted that Baba Car, which Raila had proposed and promised when running for presidency in 2,022, “could face headwinds because of budgetary constraints” just like what President Ruto faces. 

His opposition to taxes, high cost of living, and bad governance wewasell-intentioned. He had a multiplicity of ideas he never got a chance to implement them. We shall never know how he would have performed, but from past experience, we can predict,” said Iraki.

In 2022, analysts from the Institute of Economic Affairs (IEA) poked holes in the manifesto, noting that it did not detail how it would go about fulfilling the promises it contained.

The analysis that was published in a local daily raised concerns that Raila’s Azimio coalition had failed to show “ a strong recognition about the limits and effective roles of government”, which cast doubt on its leadership’s capability to govern the country.

IEA also noted that Raila’s proposed tax policy was incoherent as well as vague on the promise to review the tax regime for essential goods. 

“Equally troubling is the treatment of taxes on goods and services. There is a strong proposal to ‘review the taxation regime and its effects on essential goods and services’... the choice of product to provide taxation relief, too, is interesting because this intended change would confer advantages to specific people and thereby violate good principles of coherent taxation, which requires taxes to be stable and low,” reads the analysis by IEA.

Ken Gichinga, Chief Economist at Mentoria Economics, said Raila, in his proposal, had focused on social safety nets, rather than monetary policy.

“As a social democrat, Raila’s economic policies focused on shielding ordinary workers from harsh economic conditions. The Sh6,000 transfer to vulnerable households has worked in several countries and should have been supported as a direct stimulus into the economy, particularly at a time when households were dealing with post-COVID effects that led to high unemployment,” he said.

“He (Raila)was also keen on containing high inflation, which was eroding the purchasing power of Kenyans. He focused more on fiscal policy and the impact of excessive taxes.”

Gichinga aAdde“However, he never commented on the conduct of monetary policy, which is the main avenue for curing unemployment and inflation. This was a major gap that his economic advisors were unable to address.”

Unemployment, the enemy

And as his days on the streets come to an end, Kenyans of all means cannot forget how he fought for their economic welfare by leading protests against the high cost of living. Boda boda riders such as Patrick Mwasia and Dennis Achieng said that the late Raila’s contribution to Kenya’s prosperity cannot be ignored.

They remembered him as a champion of the interests of small businesses in the country. His contribution, they say, has informed public discourse on issues around the cost of living.

“Whenever Kenyans complained about the high cost of fuel, Raila offered himself to fight for Kenyans and ensured that fuel prices were reduced,” boda boda operator Patrick Mwasia said.

Throughout his campaigns, Raila decried that despite the abundance of resources, both natural and talented people, Kenya was caught in a poverty trap “from which there appears to be no escape”. 

“Unemployment has become national enemy number one… we continue to be held back by corruption in economic management and chronic under-investment,” he said several times.

The government consumes too much and invests too little,” he noted in the 1997 manifesto, in which he laid out a plan for economic reconstruction.

He repeats these assertions in subsequent manifestos, promising an “economic revolution for shared prosperity” in 2022. 

Kenya’s wealth belongs to the people of Kenya and must therefore be grown and shared equitably among all the people of Kenya. The economy must work for the people,” reads the Azimion manifesto, 

He further promised “to pursue a revolutionary economic framework to deliver more jobs for the youth, create inclusive wealth, reduce over-reliance on imported products, ensure shared prosperity and poverty reduction, protect the environment, use natural resources sustainably and mitigate effects of climate change”.

Aside from politics, Raila dabbled in business, perhaps underlining his belief in Kenya’s potential.

He had an interest in the energy sector, especially his East African Spectre, which he had initially founded as Standard Processing Equipment Construction and Erection Ltd.

The firm produces liquid petroleum gas (LPG) cylinders and has remained the only local player for years. It is only recently that the company has seen competition with other players setting up LPG cylinder production facilities.

He also acquired the ethanol-producing Kisumu Molasses Plant, a transaction that has been the subject of controversy. There are claims that Raila acquired it for an unreasonable amount, and even after a short operational stint, today it stands as a waste. 

In the end, Raila never made it to the presidency to implement his ideas that could have perhaps propelled the country into prosperity. In a foreword in NDP’s manifesto, Raila characterised Kenya as a country forever in waiting despite huge potential. 

“Kenya remains perpetually a country of the future, forever a promise waiting to happen, while those in positions of national power continue to fleece the nation, and to abuse and degrade its people,” he said.

Today, Kenya appears to be in a similar state of waiting that it was in back in 1997.