Details have emerged regarding a chain of events allegedly orchestrated by former President Daniel arap Moi, that set Kenya's economy on a downward trajectory.
ODM Party leader Raila Odinga in his book, The Flame of Freedom, claimed in a detailed explanation, that Moi used his presidential privileges to engineer an election victory that left Kenya on its knees economically.
On July 14, 1992, the then Attorney General, Amos Wako, brought the Statute Law (Miscellaneous Amendments) Bill to the House, seeking to remove the ceiling previously imposed on election expenditure by candidates.
"These amendments were passed without demur and set the stage for KANU's massive bribery of voters all over the country and its thorough manipulation of the electoral process," Raila narrated.
Moi then launched the infamous Youth for KANU '92 (YK'92), an arm of the ruling party meant to appeal to the young population.
Chaired by Cyrus Jirongo and William Ruto as his deputy, YK'92 went on to hand out billions of shillings to secure Moi's re-election by all means possible, Raila stated.
Odinga added that in the lead-up to election day, Moi realized that he needed huge reserves of funds to further boost his campaign team, making him order Ksh11 billion in new banknotes.
"The new banknotes were dated January 2, 1992, and their introduction into the money supply was never gazetted," Raila disclosed.
Armed with the seemingly undepletable cash reserves, Ruto and Jirongo set about campaigning for the president and dishing out goodies at will.
The effect on the economy was devastating, as inflation rose year on year by 70.57 per cent, setting it on freefall.
The huge increase in the money supply with zero increase in real output resulted in the runaway inflation.
If you print more money, the amount of goods doesn’t change. However, if you print money, households will have more cash and more money to spend on goods. If there is more money chasing the same amount of goods, vendors will just increase their prices, with the vicious cycle capable of going on for years if unchecked.
Once re-elected, Moi's government were well aware of the fact that they needed to do something, which is why his government-issued Treasury Bills worth billions of shilling to clear up the excess money supply.
However, this proved to be a case of too little, too late as the country was unable to recover.
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