IMF scares investors

Kenyans do not need the International Monetary Fund (IMF) to remind them the country may face a financial crisis unless it manages its debt well.

Evidence of the hard times Kenyans are going through is so pervasive that only those who may be intentionally blind fail to see it.

Instead, IMF’s constant harping on the financial crisis Kenya may face from external sources raises the suspicion that the Bretton Woods institution wants to bring our leaders under their thumb by reminding them of IMF’s role as the premier gatekeeper for international lenders and to lesser extent investors.

The flip side to this is that large investors take their cue from the IMF, and with their foreign counterparts, also invest minimally.

They also ship out their profits to off-shore accounts because they do not trust that the country will maintain its economic stability in the medium to long-term.

 In the worst case scenario, this serves as a self-fulfilling prophecy because it starves the economy of the much-needed investments.

The situation is made worse when investors source the bulk of their funds from local banks.

The result is that these lenders end up as funnels through which small savers’ cash is taken out of Kenya for the benefit of outsiders.

 Policies and strategies

President Uhuru Kenyatta appears to have recognised the challenges facing the country unless leaders come up with policies and strategies that will grow the small and medium-sized enterprises (SMEs) that employ the bulk of the population.

That explains President Kenyatta’s public admission last week that his government had failed the small-scale traders as well as his promise to go back to them with concrete measures to spur their businesses. The President decried the reality that his government has rolled out a red carpet for large investors while neglecting the SMEs sector.

Treasury Cabinet Secretary (CS) Henry Rotich and the taxman should also review the tax regime. It should not be too difficult for CS Rotich and his Trade and Industry counterpart Peter Munya to stop the importation of goods that can be produced or could produce with relative ease and stream issuance of licences together with counties which harass most of the SMEs.

The two cabinet secretaries are also required to come up with measures to harmonise the issuance of trade licenses.

Energy CS Charles Keter should also deliver cheaper power to SMEs considering his ministry is yet to deliver on President Kenyatta’s directive to cut by half the cost to industry.