Let State fix drawbacks in trade, the rest will follow

By Henry Munene
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Ugandan literary critic Peter Nazareth, in one of the most symbolic short stories to have ever come out of East Africa, tells us of a man named Manna Leitao, or Moneyman. Now, Mr Moneyman was not your ordinary Mr Moneybags; you know, the kind of person who splashes cash in a Nairobi social joint to everyone’s awe.

No, Moneyman was not the kind of person who would hire a chopper to be ferried to a harambee to donate a few thousand shillings, which many Kenyan politicians do to wow voters in dusty, remote counties.

Moneyman was a miserly man who did not even spare himself in his warped sense of saving. Simply put, he believed he could get rich by not spending a coin. His strange sense of austerity saw him move in to live with other people, and instead of helping pay bills, he would shamelessly offer to loan his hosts some cash which he harassed them to pay back.

It was about Moneyman that I was thinking when this whole austerity measures drive came about.

For while I think the pay-cut debate is of good symbolic value, my very honest view is that you can only cut costs up to a point where whittling a coin more would starve the State machinery of resources to run smoothly and efficiently.

And while you may, like Moneyman, save quite a tidy sum by ferreting out ghost workers, tenderpreneurs and other conduits of waste, it stands to common sense that you do not get rich by spending less and less. You get rich by making more than you spend. Our people even have a saying that goes: A coin is enticed with another, which means you must spend something wisely to gain some more.

So here is my two cents worth on how to lower wasteful spending in government. First, the primary job of government is creating a conducive environment for its citizens and other legal entities to prosper.

And while wasteful spending is a good starting point, there are a few things that we could get right and help the country expand its revenue base. One is trying to maintain a healthy balance of payments and trade. Take China for instance. They export everything from toothpicks to ear buds to Kenya, but how much do we export to that country? Zilch!

We need to mount an aggressive campaign to increase our foreign exchange by formulating policies that will encourage investors to pitch tent here and produce for exports.

That way, we can push our GDP to such great heights that even our currently frightening wage bill will be only a microscopic percentage.

Secondly, what we save from wasteful spending should help government seal budgetary holes so that we reduce domestic borrowing.

If we could move away from short-term borrowing through treasury bills, banks would have no option but to lend to private investors. This would further bring more investment into the country, creating more jobs and further increase tax revenue as all these businesses and new employees will pay tax!

Thirdly, we need to continue with our huge infrastructure programmes. If for instance we had a reliable rail network, our roads would be decongested and the port of Mombasa, if it is made more efficient in clearing imported goods, would mint many more billions of shillings for this country.

Then there is security and corruption. We need to make the country more secure for business. Fix the energy shortfalls currently driving investors to Ethiopia and make it easy for investors to set up and register businesses in the country. As it is, one spends lots of cash and time just wading through layers of bureaucracy just to set up a small hotel.

I say this because I know that while cutting down on waste is important, we need strategies to increase the national cake size as our population is growing and like Moneyman, we can’t get rich by not spending.

We must make more.