Video: Mbadi defends using soda consumption as indicator of performing economy
This story has significance for readers across Kenya and beyond.
- National Treasury CS John Mbadi got the chance when he appeared before Parliament's Finance Committee to defend his economic record amid public criticism
- Mbadi recently faced backlash after claiming that rising soda consumption showed Kenyans had more money in their pockets
- The CS cited falling non-performing loans, rising private sector credit, and improved bank profits as evidence of economic recovery
National Treasury Cabinet Secretary John Mbadi has defended his widely criticised assertion that increased soda consumption in the country reflects improved economic conditions.
The CS used a parliamentary appearance to make a broader case for his economic management.
He was appearing before the Departmental Committee on Finance and National Planning, chaired by Molo MP Kimani Kuria, on Thursday, August 20, during stakeholder engagements on a proposed Investment Policy Statement (IPS).
The session became a platform for the CS to rebut critics who had dismissed his soft-drink comparison as a trivial and out-of-touch measure of household wellbeing.
Mbadi Points to Bank Profits and Shrinking Bad Loans
The CS drew on banking sector data to support his position, pointing specifically to Equity Bank's latest performance as evidence of improved liquidity among ordinary Kenyans.
"Today, if you read the papers, you'll see the banks, Equity Banks, the profit is up. Why? Because non-performing loans have reduced from 13% up, over 13% to 9%. Why do you think non-performing loans are less shrinking? People have more ability. There is more liquidity. People have money in their pockets to pay the loans they were not paying a while back, a year ago," Mbadi told the committee.
He also noted that private sector credit, which had contracted to negative territory, was now approaching double digits, and reminded the committee that Kenya had recently been on the verge of a debt default.
CS Defends Subjective Approach to Economic Measurement
When challenged by critics who insist they do not feel any improvement in their daily lives, Mbadi acknowledged the limitations of formal economic indicators but stood by his unconventional approach.
He explained the necessity for his choice of soda as the layman's understanding of the economy's performance.
The CS acknowledged that his remarks had attracted ridicule but was unapologetic, insisting the broader economic data supported his conclusions.
"When you say that, people are saying, but we are not feeling money in our pockets. And I tell them, OK, you want to be subjective? I will be subjective with you. There is more consumption of soda in this economy. For you to consume more soda, no one will leave these children hungry at home unless you are mentally challenged or you have a problem. You leave your children with no food and you go to the shopping centre to buy soda," he said.
Mbadi Challenges Critics on Pocket-Money Argument
Turning his argument back on those demanding a more tangible demonstration of improved incomes, the CS questioned how any official could objectively verify individual financial circumstances.
"I've been giving these figures, the next thing you hear them say is, where is the money in our pockets? You are being subjective now because how can I know money, whether it is in your pocket or not? It's only you who knows. So since you want to be subjective, I also want to go subjective way with you and ask you, are you not taking more soda? What does that tell you?" Mbadi said.
The CS's original soda remark had drawn sharp criticism from Kenyans who argued he was dismissing the high cost of living by substituting credible economic benchmarks such as GDP per capita and household income data with anecdotal observations about beverage purchases.
Source: TUKO.co.ke
Reporting originally appeared via TUKO. Read the full source for additional context.