MOVING FORWARD: How President Uhuru can create jobs

I doubt the next five years under President Uhuru Kenyatta will be easy for Kenyans unless he is able to align the public wage bill to the gold standard 25 per cent of ordinary revenue, which would save the country over Sh500 billion annually. It is this money that he would use to put measures in place to create employment.

This money would be used to build special economic zones (SEZs) around the country as affirmative action for the African industrialist. Manufacturing in Kenya is racially one-sided, which distorts prices and creates artificial inflation due to collusion among a few selected players in cement, steel, hardware and plastics among other sectors.

The SEZs would offer free rental space for start-ups for six to 12 months. The start-ups would be offered machinery on credit by Government-leveraged banks, which would pay the suppliers directly, get the machines installed and hold them as collateral - even as the Government guarantees the banks through a revolving fund from savings from the wage bill. This measure would become seed capital of new-era industrialisation where youths would put their ideas into practice.

It would not be surprising to see new industries growing in areas where cutting-edge technology would become the new normal like robotics, drones, micro-chips, mobile telephony, spare parts for electrical cars and jets, and medical equipment. Additionally, farm produce such as tea would be used to make a base for medicine and cosmetics. Indeed, agro-processing would also create thousands of jobs. The other area where his government can save to create employment is fighting corruption.

It is estimated that graft eats Sh400 billion annually of our tax revenue. However, this does not include tax leaks, estimated at Sh300 billion annually. Last year, staff at Kenya Revenue Authority (KRA) were taken to court over a scam of Sh62 billion. Nothing has been heard of the progress of this case. The building of the Mombasa-Nairobi super-highway can be postponed to build the Lapsset corridor, a Vision 2030 flagship project that will open up northern Kenya, create employment for thousands of Kenyans and ease the pressure on Nairobi. On interest rates cap, the Government should be resolute and leave them in place, but supplement that effort by withdrawing from local borrowing.

This would direct credit to the private sector and create thousands of jobs at short notice. How would this be done? Through reforms at KRA to seal tax leaks and introduce daily collections in the informal sector, where 80 per cent of the Kenyan workforce is employed. This is what happens in Turkey, a key best-practice tax jurisdiction. About Sh400 billion extra would be collected annually, which could be directed at growing the economy and creating jobs.