Kenyans working and living abroad increased their remittances in the first quarter of this year from Sh23.2 billion to Sh24.3 billion despite the coronavirus pandemic that has morphed from health into an economic crisis.
This is no mean feat coming at a time when investors, particularly foreigners, are selling off their assets and repatriating the proceeds to their home countries.
The remittances also came at a time when the country’s foreign reserves plummeted as earnings from traditional exports and tourism stopped following the stringent measures adopted to contain the pandemic. It is the high time that the Government woke up from its slumber and provided a conducive environment for the investment of the remittances.
Traditionally, the recipients of these funds use them for consumption, leaving little for investment.
This leaves these individuals badly exposed to the vagaries of the global economic cycles.
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For beginners, the Government could come up with an industrial bond, which would be sold to local and diaspora investors to fund the establishment of industries that produce goods for export.
The Government would then pay the local recipients monthly even before the bonds fall due.
At the very least, this would address the current absurdity where it invites foreign investors to take advantage of the concessionary terms negotiated with other governments.
Indeed, plausible arguments can be made that part of the difficulties Kenya faces in getting its regional trading partners to allow its goods to flow freely into their countries are based on the fear that foreigners routinely use the country as the clearinghouse for dumped goods.
What is more, even in situations where these goods are manufactured locally, there is little or no local content except labour.
There is also reason to believe that the US might be reluctant, or even refuse, to renew the African Growth Opportunity Act (Agoa) for countries such as Kenya when it becomes apparent that nothing is being done to domesticate the manufacturing of the export goods.
This proposition is borne out of the recognition that in its original form, Agoa had specified that the export goods be not only manufactured in the African country from where they are being exported but must also have a high local content.
The Act was only amended when the African countries pleaded for time to grow their capacity to increase the local content.
Unfortunately, they assumed that the status quo would hold indefinitely.