A modest proposal on unemployment

During our accounting lectures, our teacher defined a budget as an estimate of income over expenditure, over a specified period of time. He was introducing the class to the quantitative element of a budget for the semester.

However, a budget is far more than a quantitative measure; it represents certain subtle aspects such as the end or start of another business period, reflection on past performance, current and future performance expectations among others.

Over the last two Budget speeches, there has been a steady increase in the budget estimates from Sh900 million in 2012-2013 to Sh1.4 trillion in 2013-2014. The 2015-2016 budget is estimated to cross the Sh2 trillion mark, as will be presented by the Cabinet Secretary before Parliament on June 11, 2015.

The numbers involved are commendable and portray an upward growth trend for a developing economy.

In the 2014-2015 budget speech, Cabinet Secretary Henry Rotich boosted the effort to eradicate illiteracy in the country by increasing the allocation to Free Primary Education and Free Secondary Education by 33 per cent, with additional allocations to school feeding programmes, sanitary towels, better salaries for teachers, improved e-learning and laptops.

With a literate population, the opportunities of employment are improved, with greater access to the job market locally and internationally. All these are the earmarks of the Economic Stimulus Programme that was tabled before Parliament in the 2011-2012 Budget speech by the Finance Minister at the time, Uhuru Kenyatta.

According to Mr Rotich, the number of students going through the 8-4-4 education system has increased, hence the need to employ more teachers and give them better allowances.

The stimulus programme made a proposal to ensure that graduates of the 8-4-4 system received wholesome training by encouraging companies to engage them as interns.

The Economic Stimulus Programme made a proposal that all companies engaging young people in universities, polytechnics, colleges and other institutions of higher learning would benefit from tax relief.

This would herald a very strong internship employment structure, which would reduce the level of unemployment in the country which, according to the World Bank, stand at 40 per cent.

These internship programmes would have ensured the students are equipped with the necessary skills to meet the growing demands of the job market.

The experience gained by a student during an internship programme contributes greatly in his or her development. It ensures that they are aware of the expectations of the job market and sets a platform for shaping their career paths.

While the interns would not be given mainstream assignments, they stand to learn a lot and when given the chance, they no doubt will prove themselves. Additionally, the learning institutions engaged in the internship programmes should keep track of the experience gained by seeking feedback from the respective companies.

This will ensure companies interact with institutions of higher learning to ensure a transparent process that adds value to all parties while reducing levels of unemployment. Most private universities have rolled out such programmes and are churning out well-groomed graduates ready for the job market.

To implement this programme, the company tax relief policy would have to be discussed with the stakeholders and agreed upon to ensure it is objective.

Such tax reliefs may take the form of reduced tax rates over a period of time or tax relief from Kenya Revenue Authority against corporate taxes for all companies engaging students in internship programmes.