From: barnhart@gagme.chi.il.us (Mr. Aaron Barnhart)
Subject: IPS: KENYA: MOI USES BANKS TO BUY PUBLIC SUPPORT, OPPOSITION CLAIMS
Originator: barnhart@gagme
Organization: Evanston, Illinois, U.S.A.
Date: Wed, 18 Nov 1992 05:43:59 GMT

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Area: Opecna Morning Transmission
Title: KENYA: MOI USES BANKS TO BUY PUBLIC SUPPORT, OPPOSITION CLAIMS


an inter press service feature

by horace awori

nairobi, nov 10 (ips) -- in the run-up to kenya's first
multiparty general elections, the central bank here has come
under criticism for ''buying support'' for the government of
president daniel arap moi.

the central bank's lending system, opposition circles say,
has enabled organisations and individuals associated with the
ruling kenya african national union (kanu) and government to
hoard up money for buying out members of parliament and
opposition figures.

''it is common knowledge that vast sums of money have been
stolen from public institutions all over the country and are
being used to buy votes'', charged former kenyan vice president
oginga odinga.

odinga leads one of kenya's main opposition parties, forum
for restoration of democracy-kenya (ford-kenya).

meanwhile, official reports say the central bank of kenya
this year has lent 228 million dollars to a few selected
commercial banks.  the amount is 100 percent more than what it
lent to the entire commercial banking sector last year.

opposition parties claim this is part of moi's strategy to
make funds available to ''government and political banks'' for
buying support for the dec. 7 presidential and parliamentary
elections.

ford-kenya's spokesperson on economic issues, robert shaw,
told ips that government's handling of the economy was
tantamount to ''economic sabotage''.

''not only is new money being printed, but also the old money
is not being withdrawn. all kenyans will pay bitterly for this
in years to come'', he says.

kenya's inflation rate has soared to 40 percent this year,
according to the central bureau of statistics here, and shaw
attributes the situation to increased local currency in
circulation.

the kenyan economy has suffered more from corruption and
mismanagement, with government ministries and public
corporations overspending their annual budgetary allocations
without treasury approval. (more/ips)


kenya: moi (2)

during 1990-91 financial year, says the auditor-general's
report, the government overspent more than 42 million dollars
without approval of parliament.

the previous fiscal year government recurrent expenditure
outstripped approved budget by 27.8 million dollars.

describing the office of the president as the most profligate
spender, the report says the treasury has been unable to impose
budgetary controls.

''ministries depended heavily on overdrafts on the paymaster
general's account to finance their extravagance'', it says.

the impact of such over expenditure and mismanagement has
been devastating to the economy, gershom ikiara, commerce
lecturer at the university of nairobi, told ips.

''the pity of it is that the deficit has been accumulated
because of corruption and heavy spending on prestigious projects
like buildings and importation of cars while essential public
services have collapsed and the infrastructure and the
productive sectors of the economy are ignored'', ikiara says.

kenya's manufacturing industry posted a negative growth of
3.8 percent in value-added in 1990 compared to six percent in
1989, according to the latest government annual economic survey.

in the mean time, the kenyan shilling has depreciated by
about 30 percent against hard currencies, making imports
expensive and forcing the manufacturing sector to cut down
orders for new machinery and transport equipment.

scarcity of foreign exchange has since 1990 adversely
affected the growth performance of all economic sectors, with
investments in industry declining from 4.3 percent to 2.4
percent last year.

agricultural output, which accounts for about 27 percent of
kenya's gross domestic product, in real value slumped from 4.4
percent in 1988 to a negative 1.1 percent in 1991.
(end/ips/ha/ar/92)