By Anyang’ Nyong’o
anyongo@yahoo.com

How does an economy grow? That, perhaps, is a question that could very well be posed to college students taking Economics 101. The answer that could be given by a reasonably bright student could run like this. “An economy grows when people produce more goods and services for their own consumption and satisfaction and as surpluses to be sold to others who, in turn, inject more money into that economy. Over time, as these people continue to produce more so as to consume and sell more, they become richer...” Stop there.

“Richer” is the word, or “better off” if you like. When any government does things to stop its citizens living better something must have gone wrong with that government. There is something happening in Kenya today, which is affecting almost every ordinary Kenyan. Without having become richer or better off, Kenyans are finding out that they have to pay more money to access goods or services they need. The most terrible experience Kenyans are going through is to have to pay rates, taxes, rents, permits etc for services rendered by national and county government at phenomenal quantum than ever before. Some rates have been hiked up by 400 per cent while salaries and incomes either remain the same or have gone down due to inflation.

If it is the objective of government to “grow” the economy, then it is rather ironical that more and more money is being taken away from the people by the government instead of leaving this money in their pockets so that they can invest it in production and produce the goods they can consume or sell to improve their life.

Let me take a practical example in the city of Nairobi. This city continues to be in dire need of housing for people in all categories, particularly middle and lower income housing. This city also needs more office space to be developed so as to satisfy the growing demand but also help lower the price per unit space. Any tax policy should have this in mind before going on the rampage to harvest money from citizens.

I know that the real estate sector has been booming continuously since the Narc days. But that was because Narc’s Economic Recovery Strategy adopted a tax policy which was much more progressive than the current approach. At that point in time, more taxes were collected by broadening the tax base while lowering the tax rate. The economy also grew by leaps and bounds.

Today increasing the tax rate beyond the means of every taxpayer seems to be the in-thing. Rather than grow, we are witnessing stagnation or shrinkage of the economy. Housing development for medium and lower income Kenyans is, no doubt, stagnating and bordering on shrinking. A good example follows. Up to late last year, if one were to build a medium bungalow in Nairobi at the cost of Sh4.5 million, one would have paid about Sh8,000 to get the plans approved.

As from December last year, this fee was increased to Sh55,000; that is over 600 per cent increase. For a medium income Kenyan civil servant who gets a loan from Harambee Sacco to build his first family house from a salary that has not been increased over the last five years, this is a very big disincentive to borrow money and improve one’s standard of living.

What is worse is when government does such things without according citizens any public hearing as consumers of government services. It is not enough to argue that the previous rates were too low.

It is more important to seek to explain why they were low, what harm was done by such rates and why a 600 per cent increase is needed in the context where there is an unlikely improvement of services by the city at the same increased quantum. The tendency for government and quasi government institutions to charge an arm and a leg for services rendered without improving the quality of services has always rubbed Kenyans the wrong way.

For quite some time now Kenya Power Company (KPC) has been levying many taxes on electricity. Kenyans have dutifully paid their power bills without seeing any improvement in the services rendered by KPC. If anything, the more money KPC collects the more power outages we experience. In my rural home in Rata in Kisumu County, it is a standard practice by KPC to switch off power arbitrarily any time it rains. On calling the company’s emergency line the answer is always a standard one: technical hitch.

A most disturbing experience was last Monday when I reported power failure in Tom Mboya Estate in Kisumu due to some power lines touching each other. This situation was dangerous and required prompt action.

Having been reported to KPC Kisumu office at one o’clock, and following phone calls from me repeated umpteenth times, the emergency services finally arrived at the site at 9pm: 8 hours later!

If devolved government is to justify itself in the eyes of the people then its service delivery needs to be less costly, more efficient, more people centred and more sensitive to complaints whenever expressed.

Judging, however, with our experience so far, we may easily be transferring the bad manners in national government to county governments. The political culture of viewing governing as a favour to the people where rights are seen as privileges, civil servants act as civil masters and ordinary citizens viewed as helpless and seeking favours must be banished.