How to manage Kenyan economy today

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All indications are that our economy is yet to experience the worst of the global credit crunch and expected recession.  Unlike other developed countries, Kenya is plagued by other habitual problems meaning that we are in a tighter jeopardy. 

Already, there are reports that consumer confidence continues to be eroded resulting in less money circulating in our economy and a further slowdown of growth.  And as it were, jobs are disappearing faster everyday as companies review their strategies in a bid to stay afloat these turbulent times. To cap it, monthly inflation rose to 25.8 percent in March.

But when you review the local newspapers, it seems as if our leaders live in a different planet completely unscathed by the issues being discussed at the G20 summit.  For, how else can one explain the political drama and intrigue that inhabits our daily lives?  And of what consequence is it for us to start campaigning for 2012, if we cannot preserve that future today?

I need to caution my fellow Kenyans; we have to stop being held hostage by political games of the day which do not add value to our lives.  Instead, we must continue to pressure our government to take on causes that are sure to shield Kenyans from experiencing the full effects of the economic downturn. 

To begin with, our government ought to reflect comprehensively on the best way to meet the shortfall in revenue from collection centres such as KRA.  We can either borrow or cut spending in order to make up for the deficit.  What we have witnessed our Government doing is cutting back on development spending.

But this is as strategy with which I beg to differ.  In my humble opinion, cutting back on development spending translates into less money being pumped into the economy resulting in cutting back of jobs and consequently less demand for other products manufactured by other sectors. 

Instead, I think the Government should be pumping money and resources into the economy.  These are some of the strategies that are being used by more developed countries.  You may rightly point out that such actions may increase inflationary pressure, but I opine that a higher inflation coupled with having higher discretionary income is the lesser of two evils compared to not having any money but experiencing lower inflationary pressures.  Of what use are lower inflationary pressures if the ordinary Wanjiku does not have the income to meet basic needs?

When the Government continues to spend on development projects, it provides a financial safety net for the majority of lower income citizens and, in turn, may resolve a myriad of major social problems currently being experienced in Kenya.  In any case, some of the money is ploughed back into the government as taxes and revenue.

Secondly, I would say that there is a need for top economists to examine every sector of our economy and come up with sector-specific incentives that stimulate production in those sectors. 

A very good example is that of the Agriculture Ministry which is trying to encourage farmers to keep farming by enhancing access to cheaper farm inputs.  Just today, I heard that electricity tariffs may be reviewed upwards to meet the higher cost of generating power as a result of poor rainfall. 

I say that this is the time for Government to provide electricity subsidies to ensure that sectors such as manufacturing are able to keep up with production and thus prevent job loss.  The role of Government is to enable businesses to continue operating at optimal levels notwithstanding a harsh economic climate.

Thirdly, a large percentage of Kenya’s population is made up of the youth.  We need to not only create jobs and motivate these young people to stay away from drugs and crime, but also to curb further job loss as a protective measure otherwise we will be failing our young people. 

The Ministry of Youth Affairs needs to continually explore and present opportunities for Kenya to export talent to countries with higher demand for services that can be delivered by our youth.  This means that they should work hand-in-hand with Immigration to enhance ease of access to travel documents required in the East African region and other markets that we partake of.  We must provide sustainable solutions for job creation and preservation.

Most importantly, I will continue to call upon our readers and fans to accept no less than what is rightfully Kenya’s.  We are a country well endowed with the most important resource; people with great potential.  Again, let us refuse to be drawn into the political melee which does not resolve any of our ongoing challenges. 
 

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