of Structural Adjustment
ROBERT MAXON & PETER NDEGE
During the period 1978-88, the Kenya economy encountered severe difficulties and was presented with formidable challenges as it sought to sustain the impressive record of growth that marked the Kenyatta era. By the mid-point of the first nyayo decade, it had become apparent to the government and the private sector that the 1980s were a far cry from the 'golden age' that marked the period 1964-75. The Kenya economy was beset, during the first ten years of the Moi presidency, with economic problems of both external and internal origin. The government's response would be the economics of structural adjustment.
As to the former problems, the continued world economic crisis of the 1970s, the increase in crude oil prices in 1979 and the world recession that followed in its wake had a negative impact on the Kenya economy. Throughout the decade, moreover, Kenya's major exports were subject to considerable fluctuations in prices, and this helped to hold back sustained economic expansion. As examples of the latter, the droughts of 1979-80 and 1984, which brought food shortages in their wake and necessitated large imports of grain, provided severe setbacks for the economy as a whole. Gross national product (GNP) per capita fell from US$420 in 1980 to US$330 in 1987. 1 The gross domestic product (GDP) growth rate fell to 3.8 per cent during 1980-87 (as opposed to 6.9 per cent for 1965-80). 2 The government was forced, as a result of these and other factors, to take the unprecedented action of issuing several major sessional papers during the decade, through which it sought to lay down strategies for meeting these difficulties. Most involved the adoption of what came to be known as structural adjustment policies (SAP). One of the first, Sessional Paper No. 4 of 1980 Economic Prospects and Policies scaled down the development programme in light of the impact of the oil price rises; another, Sessional Paper No. 4 of 1981 National Food Policy, sought to establish policies that would attain self-sufficiency in food production