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Kenya's economy is far from going to the dogs

OPINION
By Mark Bichachi | February 26th 2020
By Mark Bichachi | February 26th 2020
OPINION

Day after day, Kenyans wakes up to the constant din of politicians telling us that our country has failed. They warn us of an impending disaster unless something is done, and fast. They tell us Kenyans have no money in their pockets, and we agree. They say the economy is not growing, and we take it as the gospel truth.

Small wonder that 150 days before the apostles spoke of the resurrection of Christ, the high priest had already financed the lie that the same disciples had stolen his body. We must for our own sake, find the disciples and differentiate them from the Pharisees.

First, statistically speaking, the nation is better now than it was in 2012. We have registered positive growth numbers by all GDP statistics. As at now, GDP growth is about 6 per cent per annum. In simple terms, if you were making Sh100 last year, you are probably making Sh106 today. The Sh6 would barely be noticed and that is why you complain and agree with the politicians. In actual fact, if you earn 0 then even a 50 per cent GDP growth would still give you exactly 0.

Close shop

Slow GDP growth is still growth. Expecting that you can see 6 per cent growth and how it affects the nation in a matter of months is like asking to see how your hair grows after a shave. It is hard to perceive unless you have the skill and expertise to do so.

On the opposite side of the spectrum, if you earn Sh1 billion, your 6 per cent growth would be Sh60 million; now that is noticeable. This, however, does not mean that if the GDP grew by 6 per cent all of us will see the growth. At the same time, as the GDP is growing, there would be many companies that fold up and many people who lose their jobs.

Companies close not because the economy is bad: they close shop mostly because of bad management. Which is why when one old hotel closes in Nairobi, there are 10 three or four-star hotels that come up.

Finally, it is obvious that over time, the cost of goods increases. This is an economic fact that we like to misrepresent. First, inflation is a good thing because it is what increases the cost of your plot. When you buy a piece of land at Sh100,000 and joyfully sell it at Sh300,000 two years later, you have just benefited from the same inflation that you hate. Inflation is a necessary evil of our currency system the world over, and Kenyans need to understand what is normal inflation versus what is hyperinflation and underinflation.

Kenya once had an inflation rate of 45.9 per cent. That was in 1992 when Paul, not of Tarsus, was doing some gold deals with the government and we could not receive foreign aid amid heightened political tensions. Since then, the highest recorded inflation has been 15 per cent in 2008 (because we fought each other) and in 2012 (because we were about to fight each other). 

The arguments that we are now in ruins are demonstrably false and quite glaringly so. Unless we want to say that the Treasury mandarins are so good at fixing numbers that they have the World Bank and International Monetary Fund fooled. A Herculean feat by any standard and one which no nation has managed to do.

Create a battlefront

So why do our leaders continue to harp on about a failed state and a failed economy? The answer is simple: 2022. They know that they need to create a battlefront for 2022. The economy is an easy point to make because most people generally want more and are never satisfied, as it should be. As such it is easy to whip up emotions and get people to rally around an economic agenda.

However, we need to be cautious. The leaders who are complaining the most are currently in government. If the economy is ruined, they are at the very centre of it. They have been part and parcel of what is happening. For them to complain now is like a chef complaining about the quality of the food he prepared. Even worse, saying that something urgent has to be done is oxymoronic because they are the same people who should be doing something.

Our leaders are taking us for a ride once again and we appear none the wiser. The truth is, our economy is not dead and we are not utterly broke. We do not have an inflation problem because then the prices of goods would double and then triple in a matter of days.

That said, there still remains a lot to be done. We have roads, hospitals and classrooms to build. We need to industrialise and reduce our economic dependence on agriculture. We need to find jobs for our people and we need to do so quickly.

Therefore, the true disciples should be found preaching the gospel of programmes and plans that are at work now to improve our nation. Anyone who keeps harping on about problems that are mostly imaginary should be treated with the contempt they deserve.

Mr Bichachi is a communications consultant. [email protected]

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