Why Kenya’s economic data matters to Wanjiku

By Mbatau wa Ngai | Published Tue, February 14th 2017 at 10:05, Updated February 14th 2017 at 10:08 GMT +3

The presidency may have a case to argue that the Kenyan economy is moving in the right direction despite news of several companies posting huge losses, closing shop and throwing thousands of their employees on the streets.

What the Government has are statistics to bolster its arguments-- economic growth of about six per cent—double the global average, massive growth of investments to more than 300 per cent over the past three years alone.

But true to the adage that statistics can be made to prove anything, this growth is obvious only to the official number crunchers sitting on comfortable seats in air-conditioned offices high above the street level.

To the majority of their counterparts walking the streets eking out a living in self-employment or looking for a job their lives have become harsher and talk of economic growth remains just that: talk.

The hope for these Kenyans is that the in-coming government will have a sufficient number of policy-makers from the old school who believe that the volume of investments and the Gross Domestic Product (GDP) growth rate do not—and cannot—tell the whole story.

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On the contrary, the story on development can only be told in terms of the level of equity in the distribution of the gains made as demonstrated by the number of people snatched from the jaws of absolute and relative poverty. Anything less is mere sophistry.

In the event that the in-coming government is truly committed to raising the standards of living for the majority of Kenyans—including those in low and mid-level employment who are poorer today than they were seven years ago, according to a survey carried out by the Institute of Economic Affairs (IEA). Top considerations could be taking steps to bolster productivity on the farm and on the factory floor.

This should, ideally, be accompanied by opening of factories to add value to all the country’s exports and to substitute imports that can be easily made locally.

The skeptics among policy makers could be taken for lessons on how the Asian Tigers were hauled from the low level of development where they were with Kenya four decades ago to where they are today.

For starters, they improved their peasant farmers’ agricultural practices where they were able to feed themselves and have a surplus for sale. This may persuade the Government to slow down on building huge dams and distributing subsidized fertilizers in ways that open up loopholes that are exploited by middlemen to enrich themselves.

If it is assumed that the former Kenya Agricultural Research Institute (KARI)—now Kenya Agricultural and Livestock Research Organisation—has been doing a good job, and it has, the duty now to ensure farmers incorporate the results in their daily work processes. If this requires a rapid increase in the number of well qualified and motivated agricultural extension officers working on strict quotas and deadlines, so be it.

The officers would be used to ensure soils are tested to determine the type and volume of fertilizers used and besides ensuring what in-puts would yield maximum returns. The funds used in the provision of in-puts could easily be recovered from the farmers many of whom would be only too happy to pay when their yields increase substantially.

Improvements on the factory floor could also be increased if the Government works closely with investors to encouraging them to up-date their machines and improve the level of expertise for the workers through re-training. Those who refuse to sign on should be allowed to fall on the way side.

Investors who are reluctant to improve productivity would still be required to pay better salaries and wages to their employees. They would also expect to face increased competition from new factories equipped with the latest technology and engaging requisite skills.

These would, ideally, be set up by the Government using funds sourced from the public through the sale of long-term Treasury bonds.

Perhaps, time has come for the Government to review its suspension of plans to allow ordinary folk to participate in the sale of Treasury bills and bonds through their phones and for as little as Sh3,000.

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