Kenya has veered off path of meaningful economic growth

The duty of any responsible government is to promote economic development.

This applies to both national and county governments, which is why it is important for a nation to decide on its economic agenda.

The key indicator of the direction, the speed and relevance of a country’s economic growth and development is the Human Development Index (HDI).

Unfortunately, Kenya as a country is not doing that well as per this indicator.

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In some instances, we don’t need an indicator to tell us the quality of our lives more so with the dependency ratio getting higher and higher.

Maybe economists should seriously consider the dependency ratio as an indicator of the quality of our lives. Economic development occurs when the majority of citizens enjoy a quality life.

However, we tend to lay more emphasis on economic growth, which is a feature of economic development.

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Economic growth is an increase in the value of goods and services. We will never guarantee our citizens a quality life unless we are clear on these two concepts - economic growth and economic development.

Re-engineer processes

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According to Karl Seidman, an economic development consultant and senior lecturer at MIT’s Department of Urban Studies and Planning, economic development is a process of creating and utilising physical, human, financial, and social assets to generate improved and broadly shared economic well-being and quality of life for a community or region.

In Kenya, the resources are there, but what is lacking is the process. We need to intensively re-engineer our processes to get the maximum benefits from our natural resources.

There can be economic growth even when there is no economic development.

This means a country might experience economic growth, which is an increase in the gross domestic product (GDP), in the absence of economic development. Our country appears to be in this very position.

Economic development must be visible and manifest itself in terms of the majority of citizens being properly housed, have access to quality education and health facilities. Economists argue that the quality of the standard of living is the major indicator of economic development.

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This explains why we can have the much-touted Standard Gauge Railway and a revamped Kisumu port amid protests because a majority of the citizens do not feel their impact.

It is a difficult equation balancing economic growth with economic development while focusing on improving the standards of living.

Economic development is about raising the incomes of the masses and in the process of improving their living standards.

There cannot be economic development in countries with high levels of unemployment because money will be in the hands of a few individuals.

In any case, economic development is about meeting our present needs without compromising the quality of life of future generations. The HDI shows that as a country, we are not doing very well compared to our peers on the continent and elsewhere.

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Positive growth

The HDI value as presented in a UNDP report shows that between 1990 and 2017, Kenya’s HDI increased from 0.468 to 0.590, an increase of 26.1 per cent.

However, over the same period, Ghana and Sao Tome experienced different degrees of growth in HDI. From 1990 to 2000, Kenya experienced a massive decline in HDI while Ghana and Sao Tome reported positive growth in the index. In 2017, our HDI was 0.590, which was below the average of 0.64 for countries in the medium human development group.

These numbers are important because HDI measures long and healthy life, access to knowledge and a decent standard of living. In terms of HDI, we were number 142 out of 189 countries in 2017.

Sub-standard economic development is associated with insecurity driven by unemployment.

It is a case of denying young, energetic, educated men and women gainful employment, thus compromising their quality of life. 

Retired US President Barack Obama best captured this, saying: “Entrepreneurship empowers people to no longer be subject to aid agencies but to be part of something to pursue their dreams.”

We need to reduce our reliance on external funding. Unfortunately, we rely on outsiders instead of supporting our people to attain economic prosperity.

There is no way we will keep our youth away from crime and other social evils unless we create employment for them.

Insecurity has made it difficult to invest in the country. It is only through economic growth and economic development that we will be able to solve the problem of insecurity, poverty and disease.

Let us build factories to create jobs.

- The writer teaches at the University of Nairobi  

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Economic GrowthHuman Development IndexKenya's Economy