Kenya's rivals break deadlock over Cabinet

Kenya's rivals yesterday said a coalition government would be formed this weekend with the naming of a power-sharing Cabinet, ending deadlock that has threatened the country's economic recovery.

President Mwai Kibaki and Prime Minister-designate Raila Odinga announced the agreement after a two-hour meeting over the size and membership of the Cabinet, a key part of a power-sharing deal to end Kenya's bloody post-election crisis.

"We've agreed to announce the Cabinet on Sunday and that the Cabinet will be sworn in Saturday week (April 12)," opposition leader and future premier Mr Odinga told reporters after meeting President Kibaki.

Mr Kibaki's office said the two had agreed that a 40-ministry Cabinet would be announced on Sunday, and that both men noted "the long consultations were necessary to enable there to be an agreement that is amicable and good for the country".

But spokesmen for both sides said that while the ministries each side will get had been decided, those who will become ministers had not been finalised. Both have agreed that their respective leaders will name those people, they said.

The breakthrough, which will see Mr Odinga's Orange Democratic Movement (ODM) get about half the seats, came after a month of deadlock many feared could undo the east African nation's recovery from a crisis started by a disputed December 27 election.

Kenya's shilling currency immediately strengthened by one per cent to 62.25/35 to the dollar after the announcement.

There was no immediate reaction on the Nairobi Stock Exchange, but both markets have recouped losses since the deal was signed in February and dealers say they are watching closely for its successful consummation.

The disagreements have been over the size of the cabinet, who gets what ministry and Mr Kibaki's rejection of certain ODM politicians his backers blame for violent street protests and killings of people from his Kikuyu tribe in the Rift Valley.

The share flotation of top mobile phone operator Safaricom - the largest IPO ever in east Africa which started six days ago - also became part of the cabinet wrangling.

On Wednesday, former UN chief Kofi Annan chided both men for the delay in implementing the agreement, which he brokered in February in hope of ending a political crisis that hurt one of Africa's brightest economies and beacons of stability.

However, diplomats say both Mr Odinga and Mr Kibaki have been willing to make sacrifices to push the agreement forward, and yesterday's breakthrough came like all those before - after face-to-face meetings between the once and future allies.

International pressure has mounted on the two since the crisis over Mr Kibaki's re-election spiralled into ethnic killings that killed more than 1,200 people and displaced over 300,000.

Spokesmen for both sides declined to divulge details on who would stay from Mr Kibaki's half-cabinet named on January 8, and which members of Mr Odinga's opposition team would join.

The enlarged Cabinet, which adds eight ministers from the previous 32, is sure to anger many Kenyans who say the country can better spend its public funds than by creating more of the plum, expensive political jobs.

The two sides had disagreed on the size, with Mr Kibaki's Party of National Unity and allied parties pushing for 44 seats, with the ODM saying it wanted 25.

"On the size of the Cabinet, compromises were made. On the formation of the Cabinet, it's entirely the responsibility of each side to name cabinet positions," ODM spokesman Salim Lone said.

Mr Kibaki's team had also rejected ODM efforts to have William Ruto - blamed for orchestrating violence against Mr Kibaki's Kikuyu tribe - in the Cabinet. Mr Ruto denies any wrongdoing.