After the 1963 elections, Kibaki was appointed the Parliamentary Secretary to Treasury. He was promoted to an Assistant Minister of Economic Planning and Development and also chairman of the Economic Planning Commission within the same year. During this year he was best remembered for pushing through the July 1963 Asian Officers Family Pension Bill for retired colonial civil servants while some members in the house were opposed.

As assistant Minister Kibaki was Tom Mboya’s deputy. It fell upon them to provide an ideological justification for the economic system that Kenya had adopted. Thus came the acclaimed Session Paper No. 10 of 1965 on African Socialism and its Application to Planning in Kenya. This was the blueprint that was to inform the economic progress of the nation. Kibaki was further instrumental in implementing the income redistribution objective as denoted in the paper.

1965 was also a critical year in the ministry when In June Tanzania had thrown the East African nations into a monetary crisis as it announced an intention to withdraw from the East African Currency Board that had been there since 1919.

The departure of Tanzania saw the collapse of the east African Shilling with the three separate nations issuing their own currency (Kenya on September 14, 1966 and Uganda on August 15, 1966). Kenya and Ugunda also launched separate Central Banks.

Following the fallout between Mzee Jomo Kenyatta and Vice President Oginga Odinga and the formation of Kenya People’s Union, Kibaki was elevated into a full Cabinet Minister for Commerce and Industry on May 3, 1966.  Kibaki thus took over when the strongest pillars of the East African Union, the common currency had collapsed.

That year (1966), also saw relations between Kenya and the Soviet Union reach rock bottom due to local politics.  Kenyatta dispatched Kibaki, Mboya (Minister for Economic Planning) and Bruce McKenzie (Agriculture and Animal Husbandry) to Moscow to review the Soviet-Kenya Economic Agreement which had been negotiated by Odinga and Joseph Murumbi.  It was this renegotiation that saw the completion of the New Nyanza Hospital in Kisumu (now Oginga Odinga Hospital).

Three years later, Mboya was shot dead along Nairobi’s Government Street, triggering tribal tension between the Kikuyu and Luo.

Kibaki and JM Kariuki were the only prominent Central Kenya leaders who attended Mboya’s funeral in Rusinga Island. Some 42 years later, Kibaki unveiled a monument in Nairobi in honour of Mboya.

In the 1969 elections that followed the Mboya crisis, Kibaki almost lost his Donholm seat to Mrs. Jael Mbogo and in the 1974 he shifted his base to his Othaya home. His re-election also availed an opportunity for him to continue to serve in the Kenyatta regime as Cabinet Minister of Finance and Economic Planning. He served in this docket for 13 years that were marked by tremendous economic growth. The country attained its first highest Gross Domestic Product rate in 1973 at 14.0% from 9.7% in 1969.

Kibaki’s tenure at the Ministry of Finance and Economic Planning is credited for initiating sound policies that set Kenya on the development path. Kibaki’s successful tenure at the Finance docket was dubbed by the United Nations as the “Development Decade”. It was Kibaki who steered the country even through trying times such as the 1973 economic crisis. At the helm, the good economic performance was reflected in the decent living conditions, low poverty levels, reliable infrastructure, increased investments, high enrolments in schools and the competitive position of the country in the region.

Kibaki continued with the Kenyanization policy which had been initiated under the Session Paper (No. 10 of 1965). The policy was anchored in promoting Kenyan products and industries while at the same time expanding local and international markets. The Institute of Economic Affairs-Kenya 2010 Research Paper indicated that “between 1964 and 1972, Kenya’s GDP grew by about 6% per annum in real terms; wage employment increased by approximately 2.8%p.a with most jobs being created by government”.

In 1973, the ministry also introduced fiscal measures that were keen on changing the relative factor prices in favour of labour. The measures were fundamental in enhancing job creation in various sectors in the country at the time. Through Kibaki’s guidance, the ministry focused on the promotion of the informal and Jua kali sector.

To this date, this sector is one of the country’s biggest employers. The international media also caught up with Kibaki’s revolutionary policies.  The Times Magazine in 1981 mentioned him as the top 100 people who had potential to lead in the 21st century.

Under Kibaki’s tenure as finance minister a number of efforts were made at extending low interest credits to Kenyans through the Agricultural Finance Corporation (AFC), Land Bank and the Industrial Commercial Development Corporation (ICDC).

As the Finance Minister, Kibaki is credited for effectively managing the East African Community crisis in 1975. He led a delegation to Arusha that reviewed the treaty that governed EAC. While the treaty had undergone a number of changes severally to accommodate economic and political challenges, one of the most notable was the demolition of the East African Income Tax Department and the amendment of the East African Development Bank. After the military coup in Uganda, the EAC collapsed after Uganda recalled all its employees serving in various capacities within EAC.

All this time Kibaki steered clear of divisive politics which boosted his image as a national leader.  He never identified with the then politically-correct Gikuyu Embu and Meru Association (GEMA), which had been founded in October 1971
Kibaki decided to vie for the Kanu national chairman’s seat, the third most powerful party position, when the polls were called that year.  It was to be one of the bravest moves he would ever make in his political career.

When Kanu called for elections in October 1978, Kibaki was again under pressure not to run for the chairman’s position in favour of James Gichuru.  The Other aspirant was Cabinet Minister Jeremiah Nyagah. In the end, it was Gichuru who pulled out and Kibaki eclipsed Nyagah by polling 1,191 votes against 390.  

When President Daniel arap Moi succeeded Mzee Kenyatta in 1978 he picked Kibaki as his Vice President. President Moi allowed allowed Kibaki to also keep his finance docket until 1982. Njonjo was subsequently appointed Constitutional Affairs minister.  During the years between 1978 and 1982, Kenya experienced economic prosperity, fueled by remarkable monetary policies and fiscal discipline coupled with commodities boom especially coffee.  

A cabinet reshuffle in 1983 saw Kibaki serve as both the Vice President and the Minister of Home Affairs. Kibaki’s loyalty was seen through his actions as leader of Government Business in Parliament in his capacity as the Vice President.