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On economy, we shouldn’t box the shadows

OPINION
By Ken Opalo | November 24th 2018

Most Kenyans live on less than Sh200 a day. They do not have wage jobs and rely mostly on rainfed farming and livestock husbandry. And even for those with jobs, they are in low productivity sectors that pay peanuts. Many have to supplement their wages with agricultural subsidies from the country side. Finally, most Kenyan workers are in the informal sector – making a living by hustling from gig to gig, without enough time or managerial support to increase their productivity.

This is the reality of the Kenyan economy. But you would not know that if all you looked at was the content of the government’s policy pronouncements. More often than not, policymakers and politicians talk as if they live in a parallel universe where money is aplenty, to be wasted on phantom and White Elephant projects, or simply stolen. Largely reliant on foreign consultants and advisers, they spend a lot of time and money planning and implementing policies designed to create an outward facing economy.

The Standard Gauge Railway is an excellent example. In its design and stated purpose, it is no different from the colonial railway line. Both were designed primarily to evacuate Kenyan raw materials to the outside world, and to bring in finished imported products. The talk of Naivasha becoming a manufacturing hub is just that – empty talk. If government officials were serious about manufacturing, they would have built such hubs along the coast. But our fascination was with the railway (and the money to be stolen) and not with what it would mean for the ordinary Kenyan.

The importance of having a people-facing development agenda cannot be overstated. This is for the simple reason that when we only obsess about foreign investors and foreign markets, what we end up creating are enclave economies. You can think of this as the mall and café economy for the average middle-class family, and foreign shopping trips and properties for the upper-class families. Our “first world” enclave economy is, for all intents and purposes, shielded from the rest of the country that lives in the “third world”. Those in the former group earn livable wages, can get timely medical care, and send their children to good schools. Those in the latter group live on M-Shwari loans or the mercies of an ever more erratic climate. And because our elites mostly aspire to be in the “first world” economy, many operate like that is the mainstream of economic life in Kenya. And worst of all, they seem to believe that the “third world” parts of our economy are destined to remain so forever.

Take the example of resent pronouncements by Deputy President William Ruto on the division of labour in projects funded by Chinese loans. Mr Ruto is on record stating that all the high-skill jobs should be preserved for the Chinese, with Kenyans relegated to kazi ya mkono jobs. The last time I checked, our universities have engineering departments. How is it that our thinking, at the very highest levels of government, stops at admitting that we will forever carry water for others? This implicit division of labor in the economy only serves to entrench the idea of two-stream economies. We get loans from Chinese banks, that pay Chinese workers and firms, and the money never leaves China. The result is a giant infrastructure project designed to function as an enclave economy – off-limits from the “third world” economy (except perhaps as passengers) but still reliant on taxes from it. In a sense, the “third world” subsidises the “first world.”

If we are to transform Kenya, we need people-facing policies that seek real socio-economic transformation for real Kenyans in the real economy. Foreign investors and advisers will not do that. They do not know how.

- The writer is an Assistant Professor at Georgetown University

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