You wish to unyoke the youth? Let them save
By Fred Ogola | November 15th 2019
One morning recently, I drove through the gate of one of the biggest corporations in the country. A young man opened the gate for me. I agonised over why a 22-year-old would be a security guard.
The youth unemployment report had just been released by Kenya National Bureau of Statistics (KNBS). From it, 9 out of 10 unemployed Kenyans are aged 35 and below, and those making up most of the unemployed are in the 20-24 age bracket.
As he gingerly directed me to park - I was a guest of the CEO- we picked up a conversation. He is a university student working daytime for Sh8,000 a month and attending evening classes in one of the leading universities in the city.
This is the common story in Kenya and the world over. The choices for the youth are becoming fewer and fewer. Indeed, opulence and want mix. Isn’t it quite astonishing that nearly 1 per cent of the population control nearly 50 per cent of the total world GDP? No wonder then that the youth unemployment problem still persists.
What others think
Different people harbour different schools of thought. Some believe that the Kenyan youth is lazy and too spoilt to be helped. Others believe that our society is too corrupt to solve youth unemployment and since corruption is an untreatable cancer, there is no solution hence only a revolution will come one day like the 2010 Arab Spring.
Others blame 8-4-4 and hence the frenzy for the rollout of the Competency-Based Curriculum (CBC). Those fronting BBI (handshake initiative) believe that we need to change the national ethos and boom, we are good. But let us remember that how you define a phenomenon informs your strategy on how you deal with it.
Amid this confusion of what can be done to fix youth unemployment, one can almost believe that there is nothing anyone can do to change the destiny or that only the politicians have the silver bullet. In his poem O Me! O Life, Walt Whitman, reflects on experiences that define human life like youth unemployment and poverty.
He postulates that individually and collectively, we contribute a verse to the powerful play that is life’s course. We all can't just be sitting and whining. Someone has to do something.
The youth can put their hopes in the government; or they can blame their problems on income disparities, corruption, curriculum, lack of opportunities. They can as well put their hopes in their own hands by making wise, life-transforming decisions.
Kenya's is a consumerist culture. We eat everything. On average, our savings to GDP is 17 per cent in Africa, Kenya's is 12 per cent. When we blame the government for borrowing nearly 60 per cent to the GDP, the main question is, how can the government finance 100 per cent of our GDP from 12 per cent savings yet savings equals investment.
That is why we are borrowing from China to build SGR. We even borrow to finance our elections. What if we all saved something small?
The Asian tigers, specifically Singapore and Malaysia, were behind Kenya at independence but now the two economies are incomparable. Look at this; Germany, Europe's biggest economy, is more productive than Singapore but Singapore has a better per capita income ration than Germany. The reason is that Singaporeans save more than Germans.
I recently discovered that there is something common among all the wealthy around us; they live on passive income, while the low-to-middle income live on active income. Warren Buffet makes $1.5 million every hour even when he is sleeping; Chris Kirubi, the business mogul can spend Sh1 million per day only from his dividends, and so can James Mwangi, the Equity Bank CEO.
The reason is that Mr Buffet, 89, started saving at the age of 11 while Mr Kirubi, 78, started saving at 17. Think about this; research shows that university students spend Sh89.6 billion annually on clothes, accessories and airtime alone. What if these monies were tied down as savings? This is enough money (with change) to build the Nairobi Express Way.
Exhorting the youth to save is not easy; where will they get the money they will save, you may ask. In fact, how do we translate aspiration into action, intention into reality?
We need to shift our perspective and free our imagination. This calls for behavioural change. The youth ought to be encouraged to adapt to behaviour that will enable them save and invest in the future.
Dr Ogola is the Academic Director- MBA programmes at Strathmore University Business School and founder of the recently launched Wanafunzi Investment Unit Trust Fund.
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