Uhuru Kenyatta named as Kenya’s finance minister

January 23, 2009 by  
Filed under In the News

By Helen Nyambura-Mwaura and Andrew Cawthorne

NAIROBI, Jan 23 (Reuters) – Kenyan President Mwai Kibaki named close ally Uhuru Kenyatta as finance minister on Friday at a turbulent time for east Africa’s biggest economy.

Kenyatta — who moves from the trade ministry and is the son of independence leader Jomo Kenyatta — takes over as Kenya’s economy reels from the impact of a 2008 post-election crisis, a series of graft scandals and the global downturn.

Analysts did not foresee any immediate, major policy changes under Kenyatta, who has to fight to reverse Kenya’s economic slowdown and to tame inflation.

At 47, Kenyatta, is younger than most other senior members of the coalition government and has tried to portray himself as one of a new generation of leaders.

“We’re moving into a period that we have not witnessed in our lifetimes and it needs fresh people with fresh ideas,” said local trader and commentator Aly Khan Satchu. “I’d like to feel this is part of the post-colonial generation coming through.”

Kenyatta’s connections with the past run deep, however.

His family is one of the country’s richest, with vast tracts of land and an extensive business conglomerate.

He was the protege of former President Daniel arap Moi, and ran against Kibaki in the 2002 election, before throwing his lot in with him five years later at the December 2007 poll.

Like Kibaki, Kenyatta is an ethnic Kikuyu.

Analysts said Kenyatta was a good choice as most Kibaki allies were new faces in parliament with no experience in running a high profile portfolio like the finance ministry.

“I don’t think it is a bad choice,” said political commentator Robert Shaw. “He has a reasonable grasp of fundamentals and he is willing to listen.”

Kibaki’s office said former Finance Minister Amos Kimunya, who stepped down last July over the controversial sale of a luxury Nairobi hotel, was appointed as trade minister.

A government inquiry has cleared Kimunya of wrongdoing.

EYE ON 2012

Kenya’s shilling currency <KES=> saw volatile trade for most of Friday’s session, but shrugged off the appointment. It traded between 79.30 and 80.10, before closing at 79.65/85.

“It has nothing to do with Uhuru,” said Duncan Kimani, a Bank of Africa trader. Brokers did not see the appointment affecting the market significantly next week.

Commentator Satchu said Kibaki’s appointments showed he had an eye on the 2012 election. “These are the insiders being put in the key positions. These are the keys to the granary.”

But Shaw said Kenyatta’s task was too difficult to do much for any possible presidential bid. “Running this economy in the next couple of years is going to be very hard,” he said.

The country’s budget deficit is widening and revenue collection is slowing. Corruption allegations are also rocking the government, with senior officials accused of collusion in multi-million dollar scandals in the oil and maize sectors.

Kenya says 10 million people, about 30 percent of the population, are going hungry due to drought, disruption to agriculture from last year’s violence, and mismanagement.

Kibaki’s coalition government, formed in April 2008, halted bloodshed that killed at least 1,300 people, drove about 300,000 from their homes, and paralysed some sectors of the economy.

After 2007 growth of 7 percent, the economy is expected to expand by just half of that in 2008. A recent Reuters poll of analysts forecast, on average, 4.1 growth for 2009.

Kenya’s annual inflation rate was 27.7 percent in December.

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