Because Kenya is busy with the wrong economic debate

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Ideas and debate

Because Kenya is busy with the wrong economic debate


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Summary

  • In our refounded economic form, tourism is double what we thought of one shilling in a hundred.
  • For some inexplicable reason, we tick the “first world” boxes of the triggers of prosperity, but we struggle with our “third world” boxes that leverage human progress.

The “bottom-up” economic model and “hustler ni form” debate that have apparently changed our electoral conversation from tribal / ethnic coalitions to better dignity of life and livelihoods could be a game changer. I said that the biggest impact of Covid-19 was not life (health) but living (society, mental health, dignity of life) before we woke up with our solid livelihoods.

The fundamental tragedy in Kenya is that our unofficial illegal election campaign is leading us to answers that make no sense. To be clear, Vice President William Ruto is more or less running away with the popular economic agenda and, as my favorite blog says, “sleepwalker to the presidency” while everyone else is clinging to the straws of social welfare. Social protection here. Tax cuts there. Kenya is a movie.

No one is talking about correct and realistic numbers yet, because that would require a review of our collapsed fiscus. It is easier to talk about thoughts like “growing the economy out of debt” or “paying for social protection for the poor by cutting budgets” than publicly reflecting on the idea that Kenya is 20 seconds from where Greece was. ‘another day.

Most intriguingly, our supposed presidential candidates speak as if devolution did not exist; or crudely, which is basically a political subsidy.

It is difficult to conceive of a potential next national leader, ten years after the implementation of the 2010 constitution, who talks about what the “national” will do rather than offer what the counties could do.

A great illustration of this are certain promises to throw money into the Big Four agenda – a great idea, but in truth, an invasion of devolution. The essence of the “bottom-up” / top-down “political argument must begin with the basic idea that Kenya is the sum total of its counties, not the cascade effect of its center.

But it is more than that. Our most recent economic reorganization (as in GDP) has taught us a couple of new things. Here are the harsh truths for reflection as we listen and watch all those campaign promises.

First, we thought agriculture was a third of the economy. Well, it turns out that while it’s still our biggest economic component, it’s now a fifth. The crops (shamba) that were one quarter of the economy are actually one sixth. The agricultural agenda that bypasses our development is simply not there. Because?

Well, the tiny transport that used to be one twelfth of our economy is now one shilling out of ten. Welcome to the “nduthi” (boda boda) economy! Oh, and real estate is another shilling in 10. “Wash Wash” anyone, why can’t it be a 20,000 mortgage market on more than a million bank accounts?

Let’s proceed. In our refounded economic form, tourism is double what we thought of one shilling in a hundred.

ICT is two and a half times the size of tourism. Our creative economy of “ma-youth” is three times what we thought of three shillings out of a thousand. The “family support” economy is double the size of our creative economy. This is not just brain food, but real brain food at home.

Production you ask? Rebased from one in six to one in eleven shillings of GDP. The government itself (public administration and defense) now employs one in 20 bob in our economy; one for 30 shillings. Everything else (finance, public services, etc.) remained at the pre-foundation level. So too are education, healthcare, mining and construction as parts of our overall economic output.

Now let’s get back to our economic debate. Since this is our inclination, what problem or opportunity do we waste public and private money on? Having financialized the economy before having it adequately agricultural or industrialized, where is, and who has, the solution to creating jobs to this dilemma?

Unfortunately, these would be the national questions we struggle to answer. A smarter answer could get the national imbalance versus the county on our country’s economic development agenda. In other words, how to drill down from this new national economic framework to the local “terra vitu kwa”.

“Building Back Better” from Covid-19 is an excellent reminder. To think and act better and smarter. Social assistance is fine, but what about a universal basic income as a really great solution?

Hence, getting out of debt requires specific anti-corruption responses as much as it needs the innovation for which Kenya is recognized as an outstanding player.

For some inexplicable reason, we tick the “first world” boxes of the triggers of prosperity, but we struggle with our “third world” boxes that leverage human progress.

But here’s the really hard part. Good economic ideas only work if our tax department works. And, right now, it isn’t. The simple test of the credibility of the Alice in Wonderland economic voodoo we’re hearing is asking two things. What economy are we talking about? How is this result achieved on the fiscal front?

Can we call this the starting point for an adequate economic debate for our supposed leaders of 2022?

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