The Politics Behind the Signing Of the Interest Rates Bill Into Law

Tongues are still moving about as to what drove President Uhuru Kenyatta into ignoring those who were against the interest rates bill and went ahead to sign it into law.

It is said that the President overlooked the advice of the Central Bank of Kenya as well as that of the man at the helm of the National Treasury, CS Rotich. The Central Bank of Kenya was against the signing of the bill into law siting the effects it would have had on the economy of the country. Kenya Bankers Association was also against the bill giving examples of the countries where low interest rates have hurt the economy.

One school of thought has now come up that the politics of 2017 might have played a very big role into compelling the Head of State to signing of the bill into law. 2017 is fast approaching and according to some analysts, the President saw beyond the bill as well as his future in politics.

According to this school of thought, given the fact that almost all Kenyans were for the bill, with only a few economists being against, I would have been a political suicide for the President to reject the bill. The President, therefore, chose to listen to the majority.

The school of thought goes on to say that, since the opposition led by Coalition for Reforms and Democracy (CORD), Raila Amolo Odinga, was for the bill, rejecting the bill would have given Odinga a political milestone for being on the “side of the people.”

On Thursday Morning, barely 24 hours after the signing of the bill, commercial banks had started feeling the heat. The NSE was reading read for the banks on Thursday with four tier banks being among the top losers.

Economic analysts insist that the law will have adverse effects on the economy of the country. People are now waiting to see how and when the law will take effect.