Making economic sense out of the figures: The government did not create jobs and rain or lack of it should not be the victim.
By charles Juma
| October 23rd 2014
The screaming headline from most of our media and more particularly The-Star news papers is: WE CREATED 742,000 JOBS, SAYS WAIGURU. Below it is yet another eye catcher: The Uhuru administration yesterday said it had helped created 740,000 jobs last year, …………….Planning Cabinet Secretary Anne Waiguru blamed the below target performance on depressed rains that reduced agricultural production, high interest rates that limited borrowing by private sector and reduction in public expenditure during the transition year. –
In the Short story Anthology: Half a day and other Stories, there is a story titled: On the Market Day, where the governmentthrough its radio station blames lack of rain on God. Well here our government is now blaming the very rain itself for not creating jobs that they so shouted about in 2013. Then you ask yourself how the private sector managed to create 84.4% of the total jobs created both y the government and private sectors!
Of the three reasons above, I would not accept that rain or lack of it is to blame. I am also tempted to vouch here that the government is lying through the teeth by taking credit for the 625,900 jobs created by the private sector in the year 2013. When the government claims it ‘helped’ creates, it means, they provided among other things, good environment, security and policies that enhanced job creation and investor confidence, reduced the cost of living and tamed inflation.
Any attribution to that effect should be made to the new constitution and not what the government is trying to say that they participated in devolution process to the counties thus creating the said jobs.
From a lay man point of view this may be so but looked at critically you get the answer from the government’s own share of job creation in 2013, a paltry 2.63% (26,300 jobs for direct governemt input)) based on their target of one million jobs, a whopping 97.37% gap! If it were to be a class performance by apupil/ student, the teacher would have written either, ‘Very poor,’ ‘Stop Sleeping in Class’ or ‘Pull your Sock!’
First the poor would say Jubilee set itself for failure. They were very overambitious, buoyed by the 6 million votes gotten the last elections, thus over predicted capacity to match the talk and set a limit for themselves to 5.6% to10% subsequent growths. That was being naïve given that they had to do a lot in setting up their foundation for smooth operations from the previous coalition government. So by attaining 4.7%, it gives one a poignant lesson: too much talk and a false air of bravado without action are bad for economic sense of growth. Ruling is not as easy as campaigning.
Let’s start with the cost of living and inflation for the two are correlated and intertwined like conjoined twins. Ever since the jubilee government came to power I am yet to be provided with factual statistics to shows any slowdown in the rate of inflation or reduction in the cost of living. The inflation rate for the month of April 2014 alone is up by some 0.31% to 6.41% from the previous month of March 6.27 % and it has been oscillating at that very level of between 5-7% since March 203 elections with no signs of slowing down. All this they attributed to the increase in the cost of food and non-alcoholic drinks by 1.6%, housing, water, electricity, gas and other fuels increased by 0.33 per cent.
Looking at the Purchasing Managers Index Survey 2013/14 by a respectedprivate Poll body which has been accurately reflected by the statistic released by Planning Cabinet Secretary ,the private sector did far much better in the face of very many changes that the Jubilee government failed to tackle of providing conducive environment for doing business. Security being among the key elements the government failed in completely. I need not belabor what others have said about insecurity situation in Kenya where even the security officers themselves have become targets of carjackers and other criminals. The facts are all out there for anyone to see. It is so insecure in Kenya today that you even don’t know whether you are safe in the house, streets or at place of work. We just live each day by chance; fate!
As the cost of living continued to increase, the staff cost also increased in the private sector, in tandem as the private sector tried to generate more job opportunities. Input costs: staff cost & the purchase price inceased with fluctuations seen in Output, comprising both Domestic& Export orders: Thus the cost of operation in Kenya remained one of the highest in the world in 2013 compared to Eurozone, China and US markets.
By admitting that high interest rate played a part in the reduced borrowing from financial institutions by the private sector, also shows that Jubilee government never made good their promise to reduce the interest rate so that it bolsters the borrowing by the private sector.
The other area the government failed in is protecting the local products and ensuring cheap and fake products from outside do not flood the local market. Can anyone tell me what happened with the switching off or unregistered phone lines and the fake phones? (Since that announcement I have gotten so many threatening smses which when the police tried to look into in details, they concluded the most of those numbers are unregistered) Another of such products is the electric blub, unless am a lone but the 80 watts bulb which used to cost Ksh 50 in 2012 now cost Ksh 150, but only last for one week. In fact if you go to the vendors they ask you which type you would want: the cheap China made or original and there is no knowing which one of those is the original Phillip bulb out there! The net effect is that the poor as continued to go back to his/her pocket so often since the bulbs keeps blowing up: that is also an increase in the cost of living!
Lastly the government’s priorities was from the onset after march 2013 elections set elsewhere other than managing our economy key among them is fighting wars that are not necessarily the in the jurisdiction of the Governments of Kenya as enshrined in the constitution. A case in point is the all out war dubbed Shuttle Diplomacy II that saw all the government machinery aimed at the ICC to the detriment of the progress of the Kenyan economy. Kenya even contributed a token of a few million dollar to AU as a ‘Thank-you’ gift -for -standing –with- us,’ while Turkana was being ravaged by debilitating drought and hunger!
The latest of such useless wars is the government’s meddling in the affairs of the labor Union(s). How would you create jobs when the very labor minister Kazungu Kambi has undertaken it upon himself and his ministry to micromanage labor union affairs by registering and running through proxies a parallel government friendly union in the name of PUSETU? Now because the courts have banned his PUSETU from interfering with the events of Labor Day celebration in May 1st, he got piqued and now says the government will not attend the celebrations organized by COTU as if it is a must they attend.
Even at the worst time of absolute dictatorship by Nyayo’s KANU, Moi never attempted to interfere with the labor union by even thinking of sponsoring the registration of a parallel union simply because COTU opposed KANU rule. Growing up I read in our class about the labor movment in Kenya since the 50s of such men as Tom Mboya, Clement Lubembe Denis J. Akumu, Juma Boy, Justus Mulei, Joseph Jolly Mugalla . Truth is, there are several things that I don’t agree on with the Atwoli led union but it’s not of the business of the government to do that business. Such machinations can only be found in communist China and Russia from which Jubilee borrows much of their policies of running this economy.
And that doesn’t make any economic sense! I pen off with his quote: Never allow your tongue to contradict your vision. The power of your tongue has the ability to shift you from one dimension to the other. Develop a language that supports your ideas- Prophet Emmanuel Makandiwa
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