President Uhuru Kenyatta announced a raft of measures aimed at jump-starting the economy in order to put money in the pockets of those at the base of the pyramid.
He also reshuffled his Cabinet and sacked Mwangi Kiunjuri whose tenure at the Agriculture ministry was laden with false steps. If followed through, the measures that include breathing life into the fledgling Micro, Small and Medium Enterprises (MSMEs); revitalising the tea and coffee sectors – two of the country’s main forex earners- and doing away with exploitative middlemen in the agricultural sector, will no doubt lead to the much-sought socioeconomic transformation.
Agriculture remains the country’s economic mainstay. According to the Food and Agriculture Organisation, agriculture contributes 54 per cent of the country’s GDP. At least 4 in 10 people are employed in the sector. In 2018, for example, tea earnings topped Sh100 billion. No wonder when agricultural activity is depressed- like at the moment- the economy lags.
Cumulatively, the sector received an injection of more than Sh2.1 billion besides slapping a 16 per cent VAT on imported milk products from outside the East African region. Together with agriculture, the MSMEs contributes nearly 80 per cent of the country’s GDP. The importance of MSMEs, therefore, cannot be gainsaid.
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In spite of their huge contribution to the economy, MSMEs have been neglected and left to their own devices: credit facilities dried up as banks and financial institutions hedged against risks - in the wake of interest rate caps.
The initiative by five banks to set aside Sh10 billion for lending to SMES at 9 per cent and the setting up of business incubation points - Biashara Centres- is a welcome boost. We hope that the Government-brokered partnerships with this important sector will lead to a win-win outcome.
President Kenyatta must have been goaded by the realisation that time is running out to fix the economy, address rising unemployment, clean up government, cure corruption and cement the drive for a peaceful, progressive and united country.
He deserves plaudits for the fresh attempts to get the economy moving. He has made similar attempts before and it is easy to excuse the feeling of cynicism; that he is doing too little, too late. But it is better late than never.
Yet, the President is not reinventing the wheel. Some of those recommendations, like value-addition, providing incentives and restructuring the tea-buying agencies, have been mooted before. It is the follow-through that has been lacking. For example, starving the auction of tea quantities and insisting on value-addition will lead to higher returns to farmers. This is much easier because our tea quality is unique. His directive to restructure the sector will ensure that farmers get good prices and earn handsome bonuses.
Kenya is a country dripping with great talent. The proposal for the Kenya Copyright Board to surcharge content users like broadcasters, hotels, hospitals and matatus will go a long way in promoting local talent through gainful employment. The President did well to do away with the proposed NHIF charges. It is good he listened to the hue and cry from stakeholders that not enough consultation was carried out on the issue.
Publicly co-opting the National Intelligence Service into the fight against corruption takes the campaign a notch higher. President Kenyatta has declared corruption a threat to national stability and hinged his legacy on eradicating it.
His almost single-focus on the issue has provided the political goodwill police and prosecutors need to pursue cartels and public officers who have stolen from the public. Hopefully, the more senior government officers are held to account for their actions, the less Kenyans will have to worry about a thieving bureaucray. Indeed, the problem in Kenya has not been lack of laws to fight corruption, but political expediency where leaders posture for probity while simultaneously encouraging their surrogates to raid the coffers.
For the third time in two months, the President has reiterated his belief in the Building Bridges Initiative as the silver bullet to address the country’s ledger of historical injustices. Since 1992, the country has been walking in the shadows of election violence every five years, largely due to the winner-takes-all system. This has reduced political competition to a matter of life and death, with communities fighting for access to government resources and predatory politicians acting as intercessors to the coffers.
But this is only one of the challenges facing Kenya. There’s also need to address land and resource inequalities, which have always been lost in the chorus of political reforms.
The least the President can do for Kenyans is to ensure that any proposed reforms speak to the aspirations of Wanjiku and Nakhumicha, and not just the whims of the political elite traversing the country today for support.