Recast Kenya's economic agenda to spur growth

National Treasury CS Ukur Yattani (PHOTO: FILE)
The economy is down and this is not time for blame games.

We need a debate how to revive the economy because, sooner or later, the Kenya Revenue of Authority (KRA) will not be able to collect more taxes. Businesses are down and some entities are relocating to other countries.

The problem is that we are becoming indifferent to a dire state of economic affairs.

Last week, it was reported Kibos Sugar Company was considering relocating to Rwanda. If that happens, more than 500 workers will be left jobless.

As a country, we should choose whether to have an economy that is productive in contrast to development.

We have been borrowing to build railways, roads and infrastructure, and this has spurred growth. It is productivity that pushes up the Gross Domestic Product (GDP) and benefits the citizens.

The irony of Kenya’s economic situation is that we are untimely sacrificing primary activities such as agriculture and animal husbandry to the benefit of tertiary activities.

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It is time we prioritise occupational structure because research shows a significant relationship between economic growth and occupational growth. But we are unable to exploit that relationship.

Primary industries

Unemployment translates into low income per person.  The key agenda should be to have food on the table by investing in primary industries thus creating as many jobs as possible.

Kenya’s problem is that its primary industries or activities are on the decline while unemployment is up.

It’s time to use the idle labour in our firms.  It doesn’t make sense to switch to industry and services sector if our agricultural sector is in distress.

Lets’s think of good returns to maize growers and sugarcane farmers. We are spending lots of money on services yet the manufacturing sector is dented - translating to a huge import bill.

India first talked of the green revolution and then went full blast into manufacturing. It is now putting more emphasis on the services sector. Their service sector is strong to a point that they export it to the US and earn a lot of foreign currency.

We must stabilise the prices of basic goods and services, including unga, sugar and milk to avoid starvation and malnourishment.

In any nation, there is the minimum for each occupation. In other words, how much do we invest in agriculture, industry and services to achieve a balanced economy?

 Ideally, we should focus less on agriculture, but for obvious reasons, we cannot. We must first strengthen our primary sectors to allow the manufacturing sector to take off.

The economy will only develop if left to the private sector until it reaches a point where it is driven by over 70 per cent of the population.

Sufficient time

The government must be selective in terms of the investments it undertakes.

This will help it have sufficient time and independence to do its supervisory role.

This is the only way to improve GDP. The problem of Kenya’s economy is that its growth is not sufficiently inclusive to many groups.

This explains why according to one World Bank report, 29.2 per cent of Kenyans cannot access basic needs.

We must encourage private investments. In economies where private investment is higher than public investment, growth is faster and citizens can get jobs, have income and save more.

Where the public exceeds private investment, there might be savings that do not accrue to wider citizens.

Furthermore, public sectors remain wasteful to the extent that there are no savings. If that happens, then the burden of maintaining State activities fall on the citizens.

And as the year comes to an end, leaders should focus on increasing income and eradicating poverty by creating employment for the youth.

Since the devastating doctors’ strike, our health sectors were punctured.  The education sector, though not badly off, requires improvement - be it in schools, colleges and universities.

The recent floods provide valuable lessons on the urgency to sustain our environment.

The vulnerable in society are exposed, and this ought to be addressed.

These should be our New Year resolutions as a country.

-The writer teaches at the University of Nairobi

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