Friday, 18 March 2016

Economic Take-off Abridged By Covetous Individuals

Most of my write-ups in this blog have largely focused on issues that deal with economic and political governance with respect to my beloved state of Kenya and my continent of Africa. It is not that I hate or in any way regret being born in this part of the world but I take it as a duty and a challenge to make Kenya and Africa better than I found them. On this note, therefore, I will neither tire nor relent in my efforts to see Kenya and Africa in general become better places as far as governance is concerned.

Fast-forward, Kenya is a country that has great potential to become an economic powerhouse in Africa and even in the world. This great potential can be realized through the socio-economic policy papers and the respective policy frameworks that have been formulated since the time we attained our independence up to the present moment.

In fact, at one time, Kenyans were considered as the best policy makers in the world. This accolade, however, is accompanied by the word but which has completely reversed if not negated the compliment so made by public policy analysts around the world. The but itself is that we are so poor when it comes to policy implementation. This is the harsh reality and the bitter truth.The poor policy implementation that has become the zeitgeist in the socio-economic policy realm can be traced to the unending if not spiraling rates of corruption that continue to bedevil the Republic of Kenya. 
Recently, a report released by the PwC ranked Kenya as the third most corrupt country in the world. To me this was not a shocker going by the recent slippery-slope dynamics with the revelations of incidences of rapaciousness that have rocked the Jubilee administration.

In addition, a few days ago, the chairperson of the Ethics and Anti-Corruption Commission (EACC) Philip Kinisu candidly revealed on how approximately Kshs.600 billion of the national budget is lost through corruption. Can you imagine what could be done with this amount of money?

Talk of infrastructural development in terms of construction and expansion of roads, construction of railway lines, modern airports, seaports among other social amenities that are key to necessitating an economic take-off. This is certainly the economic cost of corruption. 

Our country’s economic growth for the last three years has been an average of 5.5% with an economic growth rate of 5.6% in 2015, 5.3% in 2014 and 5.7% in 2013. To me, this is an average economic performance going by the potential that our economy harbors. If transparency and accountability could be strongly adhered to by the relevant authorities then achieving the magic 7% economic growth rate would not be difficult. 

In as much as our economy is prone to the exogenous shocks due to the inter-linking nature of the global economy, I am pretty sure we could be gearing towards the double-digit growth promised by the current regime if financial and budgetary prudence could be effected. But at the moment this remains a pipe-dream because of the stagnation in economic growth that is being seen.

I deeply understand that the Jubilee administration minions would like to chest-thump and shout at the top of their voices that the economy is doing well, may be well than Burundi, Somalia and the ilk, but the reality is that our economy is experiencing stagnation. Blame this largely on corruption.

It is also because of corruption that the Cabinet Secretary in charge of the National Treasury, Henry Rotich, recently decided to reduce the development expenditure by about Kshs.49.1 billion in the forthcoming Budget Policy Statement for the fiscal year 2016/2017. His explanation; the Kenya Revenue Authority failed to meet its revenue collection targets as at December 2015. 

The failure by the Kenya Revenue Authority to meet its revenue collection targets is largely due to corruption. I do not understand why this is the case considering that Kenya is among the few countries in the world where the rates of taxation are very high. Sometime late last year, the KRA staff was to be subjected to a radical lifestyle audit whose findings we are yet to hear. Or it was just another PR gimmick. Who knows?

This incongruity between the revenue collected and the revenue targets set is occasioned by plundering and this has continually led to relatively huge budgetary deficits whose result has been the limited financing of key infrastructural projects hence holding back Kenya’s would be rapid economic take-off. Or from another angle, why should we have huge budgets that we struggle to finance? I know that the Treasury honchos are sticking to the Keynesian principle of deficit financing and spending but they get it wrong because this only works well in case of an economic recession which we are not experiencing. Again, deficit financing cannot be applied in all economies because there is a lot of dynamism. These budgetary deficits may be the trigger factors for corrupt activities by the KRA.

A recent report by the World Bank revealed that Kenya’s level of unemployment is relatively high even outpacing her counterparts in this geographic region. The high level of unemployment is due to the economy’s inability to create more employment opportunities for the skilled individuals who are churned out in thousands each year by the training institutions.

Few days ago I came across some hearsay that 800,000 jobs were created by the economy last year in both the formal and informal sectors. This is just some wanton statistic propagated with the sole aim of gaining political mileage. The truth of the matter is that the level of unemployment is very high because the financial resources meant to stimulate job creation are squandered by some politically correct individuals.

For instance, have a thought on the National Youth Service, the Uwezo Fund or even the Standard Gauge Railway. Avowedly, these were projects meant to enhance economic growth with a view of creating employment opportunities. Billions of shillings were set aside to actualize them but we all heard cases of embezzlement tagged on each of the projects. 

The Jubilee administration should pull up its socks in terms of creating jobs for the youth. I clearly understand that many people relate the current unemployment crisis to the education system but what if the embezzled funds were diverted to institutions of higher learning purposefully for research activities and financing start-ups by brilliant college students? At the end of the day the bottom line still remains to be corruption.

Mid last year, the US President Barack Obama while in Kenya gave a public address in which he talked about corruption and lamented on how it is pulling back Kenya’s progress. He in fact stated that 250,000 jobs are lost annually due to corruption. Later on, Pope Francis paid a visit and he talked about the same issue. 

The steps taken by the current regime to expunge this vice are a bit superficial. Until a ‘big fish’ is sentenced with no privilege accorded behind bars is when the common folks will renew their sense of patriotism and optimism. Otherwise, for now, tackling graft is mere rhetoric despite it being a bread and cheese question. Economic take-off is being compromised by the cost of corruption.

No comments:

Post a Comment