A formidable task awaits President William Ruto’s nominee for the National Treasury, John Mbadi. If Mbadi successfully navigates the rigorous parliamentary vetting process, he will step into a role fraught with challenges, inheriting a government grappling with a significant financial shortfall while facing immense pressure to deliver on its promises.
John Mbadi, currently the chairman of the Orange Democratic Movement (ODM) and the National Assembly’s Public Accounts Committee, is set to replace economics professor Njuguna Ndung’u. Ndung’u’s 18-month tenure was marked by a series of economic crises, including a sovereign debt default scare, a volatile shilling, and persistently low revenue collection. As Mbadi prepares to take on this crucial role, his sharp critiques of the government’s fiscal and economic policies will now be tested in the crucible of execution.
The challenges before Mbadi are monumental. The administration is tasked with sourcing funds to finance a staggering Sh3.8 trillion budget for the current financial year. This comes after a public uproar forced President Ruto to abandon the Finance Bill, 2024, which could have generated an additional Sh347 billion in revenue. The abandonment of this bill reflects the public’s deep-seated concerns about increased taxation and the government’s ability to manage the economy effectively.
In response to the financial crisis, President Ruto announced a series of austerity measures aimed at reducing government expenditure. These measures include the merging of state agencies with overlapping roles. “The 47 state corporations with overlapping mandates will be dissolved and their functions transferred to ministries and state agencies,” Ruto stated. This move is expected to streamline operations and cut costs, but the effectiveness of such measures in bridging the budget deficit remains to be seen.
Mbadi’s immediate challenge will be to address the over Sh700 billion budget deficit. President Ruto has hinted at the possibility of more borrowing to fill this gap, a strategy that will require Mbadi to perform a delicate balancing act. Convincing risk-averse lenders, both locally and internationally, will be no small feat. Mbadi will need to employ his expertise and experience to negotiate favorable terms and ensure that the country does not fall into a debt trap.
Mbadi’s educational background, including a Master of Business Administration from the University of Nairobi, and his extensive experience in public finance oversight, provide a solid foundation for his new role. However, the complexities of the current economic environment will test his skills to the fullest. He will need to navigate political dynamics, public expectations, and the harsh realities of the global financial landscape.
Moreover, Mbadi’s tenure will likely be scrutinized closely by both supporters and critics. His previous role as a critic of the government’s economic policies will add an extra layer of pressure, as stakeholders will be keen to see how he transitions from critique to implementation. Success in this role will require not only fiscal acumen but also strategic political maneuvering and effective communication with the public and international partners.
As John Mbadi prepares to step into the role of National Treasury head, the stakes could not be higher. The country’s economic stability, public trust in the government’s financial management, and the administration’s ability to deliver on its promises all hinge on his performance. Mbadi’s ability to navigate this complex fiscal maze will determine not only his legacy but also the economic future of Kenya.
