Kenya party politics

Kenyan opposition leader Raila Odinga unofficially inaugurated himself as president in the capital, Nairobi, on 30 January 2018, while President Uhuru Kenyatta of the ruling Jubilee party finalised a major cabinet reshuffle on 26 January.

• The Kenyan opposition is fracturing as new leadership emerges from the historically marginalised Coast region, thereby undermining the effectiveness of any legislative boycott.
• President Kenyatta reduced Vice-President William Ruto's influence in the cabinet reshuffle, indicating a strategy to block Ruto's 2022 presidential bid will cause policy paralysis and delay implementation of hydro-power projects in the Rift Valley from late 2018.
• Until then, the new cabinet will seek to revise revenue-sharing arrangements for Turkana's onshore oil and remove a cap on interest rates, although proposed fiscal consolidation would be slow and piecemeal.

Kenya's opposition National Super Alliance (NASA) coalition leader, Raila Odinga, unofficially inaugurated himself as president on 30 January, in a ceremony attended by at least 75,000 supporters, The supporters were drawn largely from Odinga's Orange Democratic Movement (ODM) - NASA's numerically largest coalition member - and the ceremony, held in Uhuru Park, Nairobi, passed relatively peacefully.

Odinga lost the disputed 8 August 2017 presidential election and boycotted a re-run in October that was ordered by the Supreme Court (see Kenya: 26 October 2017: Re-run Kenyan election occurs with minor disruption, indicating splits emerging within opposition coalition, reducing policy paralysis). The court determined that neither side unduly benefited from technical failings in the electoral process. Odinga subsequently formed a 'National Resistance Movement' (NRM) in November 2017 to support his swearing-in as unofficial president, which served as a vehicle to establish parallel local governments - known as 'people's assemblies' - intended to pressure central government into enacting electoral reforms.

Odinga's decision to boycott the re-run election had the unintended consequence of motivating new rivalries within his ODM party and the NASA coalition. The opposition is now considerably weaker and unlikely to sustain an effective parliamentary boycott. For instance, opposition vice-presidential candidate Kalonzo Musyoka, who leads NASA's second largest party, the Wiper Democratic Movement (WDM), did not attend the ceremony, along with Odinga's two other remaining co-principals. Musyoka is likely responding to WDM politicians' dissatisfaction with ODM taking the majority of parliamentary positions. WDM leaders represent the bulk of Kenya's ethnic-Kamba constituencies, and are critical to broadening NASA's support base beyond Odinga's ethnic-Luo strongholds around Lake Nyanza. Moreover, only seven of the 47 county governments are actively supporting the NRM by holding parallel meetings, further indicating narrowing support around Odinga.

Jubilee's regional politics

Prior to Odinga's 'inauguration', on 26 January, President Uhuru Kenyatta finalised a major cabinet reshuffle. This confirmed Kenyatta's initial statement on 8 January that the energy, finance, and transport ministers would retain their portfolios at the start of his second term in office. A newly created mining and petroleum ministry was also separated from the energy ministry, headed by former Turkana county governor John Munyes, who lost the August 2017 county elections on a Jubilee ticket and is notably also a power broker in Turkana. Munyes's appointment was likely motivated by Kenyatta's desire to expedite development of the Turkana oil field, while reducing the share of revenue earmarked for the local community (from 10% to 5%), in favour of the county government (at 20%), and central government and private oil companies (splitting the remaining 75%). He will likely provide an important counter-balance to opposition co-ordinated by the Council of Governors chairperson, Josephat Nanok, who also hails from Turkana, and is demanding a minimum 30% share for the county government. The final arrangements will be finalised in the Petroleum (Exploration, Development, and Production) Bill, scheduled for a second reading by parliament in February.

This and other appointments, such as Okur Yattani (an ethnic-Gabra) as labour minister and Monica Juma (a Mikikenda) as foreign minister, are in line with the ruling Jubilee party's strategy of broadening its political alliances to include leaders of historically neutral regions and ethnic constituencies.

These changes also indicate a strategy to block Vice-President William Ruto's promised 2022 election bid, in favour of President Kenyatta eventually proposing a hand-picked Kikuyu successor. This is highly unlikely to be initiated before 2019, and would be achieved by co-opting support from alternative Kalenjin leaders (see Kenya: 8 January 2018: Partial cabinet reshuffle indicates successful strategy to block Kenyan vice-president's 2022 succession and resume devolution process). Several medium-sized hydropower projects earmarked for construction in the southern Rift Valley (Ruto's stronghold) are now likely to be delayed from late 2018, as new chairpersons are appointed to implement agencies responsible for co-ordinating these. The streamlining of Kenya's more than 500 parastatal organisations was a key campaign priority for Kenyatta in 2013, but he now faces less opposition to this.

Outlook and implications

If ODM does not offer WDM more parliamentary committee positions, as is likely, then WDM would be first to exit the opposition NASA coalition. A joint statement by NASA leaders meeting on 2-3 February to this effect would be a strong indicator that the opposition coalition will fracture. Within the ODM party, IHS Markit assesses that deputy leader and Mombasa county governor Hassan Joho, who represents the southeastern Coastal constituencies, will gradually build new alliances and is Odinga's most likely successor. Since being re-elected by a large majority, Joho has used his strong mandate to support Odinga's 'people's assemblies', but refrained from associating himself with the party leader's NRM. He is also more willing to engage the judiciary in electoral reform rather than backing protest action. Joho demonstrated this on 31 January when, in contrast to Odinga, he discussed electoral reforms with Chief Justice David Maraga, who was responsible for nullifying the original August 2017 presidential election. Public meetings between Mombasa's leadership and disaffected western region leaders (who opposed Odinga's decision to boycott the October election re-run) would be another indicator of ODM's likely split.

The Jubilee party will retain an unchallenged 49% parliamentary majority this year. Although its current policy priority is to consolidate the growing public-debt burden, constraints outlined in the 19 January Budget Policy Statement indicate that this will occur in piecemeal fashion (see Kenya: 25 January 2018: Upward revisions to Kenya's 2017/18 budget deficit targets highlight fiscal consolidation challenges), primarily focusing on cutting bloated county wage bills and improving private credit growth, likely prioritising removing the cap on interest. During Kenyatta's previous term in office, energy was one of the largest portfolios and faced criticism for alleged power price inflation. Creation of the new mining and petroleum portfolio indicates renewed focus on delivering the president's election promise of reducing electricity costs to manufacturers. The new mines and petroleum ministry will be responsible for finalising a review of mining law, probably introducing stricter requirements on local content but also an overall more competitive regulatory and tax regime compared to regional neighbours, particularly Tanzania.