Billions of dollars are being pumped by donor countries and agencies into initiatives seeking to help African nations grow their economies.
Looking beyond the World Bank, the International Monetary Fund (IMF), the United Nations and donor countries, one easily notices the desire in the hearts of global leaders to create stable economies for their citizenry.
I am, however, disappointed to note that instead of looking optimistically for an economic turnaround, Kenyans must brace for tough times ahead.
The undying thirst of borrow and borrow more by the Jubilee government has set the stage for this bleak economic prospect.
Is it economically sound to take high-interest loans to service recurrent expenditure? The answer definitely is no!
The weak and unstable shilling has led to high interests rates. This 103 level is one of the lowest since October 2011.
Though Kenyan exports are now cheaper on the international market, imports are more expensive. This not only sabotages the purchasing power of our people but also lowers Government revenue from imports.
This inflation has informed the Central Bank of Kenya’s decision to increase the base lending rate. This will surely slow down growth as Kenyans will shy away from high-interest bank loans thereby curtailing the cash flow.
President Uhuru Kenyatta has made it clear on several occasions that should we come to the worst, raising value added tax (VAT) will be the Government’s last resort to meet the tax revenue target.
Raising VAT from 16 per cent to 21 per cent will limit and minimise the purchasing power of the people. Plainly speaking, commodities and services are bound to be expensive in such a scenario.
I find it hard to buy the lie and carefully choreographed propaganda that Kenya is broke. The truth is our spending outstrips our income.
To do an economic turnaround, let’s create a sustainable society where economic prosperity is shared equitably.
We need to create a system of low tax rates. This will stimulate small businesses and move capital into taxable activity thereby increasing revenue for the Government.