Kenya’s economy will collapse unless the government begins to make changes


jobleess

The Kenya Government should act on its economy to avert a national Crisis. It’s indeed sad that more than 60% of Kenyans are struggling to meet the costs of basic necessities and with high unemployment, more Kenyans are living in poverty than they did under President Moi. Over thirty one million Kenyans are struggling to put a meal on the table, inflation has skyrocketed; the people’s purchasing power is dwindling each day and the shilling can’t stay stable.

A small class of Kenyans has mysteriously risen to riches through unscrupulous (corrupt) means- from middle class income people to multi-billionaires. The same class, accounts for over 40% of the Country’s Gross Domestic product. This is the genesis of the wide disparity between the rich and the poor in the Country and it isn’t getting any better.

Economic prosperity talk in Kenya is all fiction because the poverty levels in the country remain a paradox. Although corruption was rampant during Moi’s regime, people could afford the basic necessities of life like flour, kerosene, and cooking oil  but now, the the  government seems out of touch with the plight of its citizens and is setting itself up for trouble. In any Country, when citizens cannot afford to feed and clothe themselves and their families, no one, including millionaires and billionaires can boast  about comfort or safety.

Poverty,unemployment and broken promises will eventually push Kenyans even Jubilee voters to act and demand better in matters pertaining to the looming economic crisis.

The Cabinet Minister has already confirmed that ordinary revenue totalled Sh779.4 billion against a target of Sh823.7 billion, reflecting an underperformance of Sh44.2 billion.The poor revenue performance was attributed to unfavourable macroeconomic conditions in the second half of 2012 combined with administrative challenges in VAT collections.

“Kenya’s large and persistent current account deficit of over 10 per cent of GDP in the last three years raises major concerns for sustained economic growth,” he said.The Treasury said short-term flows that Kenya has continued to rely on to finance the deficit could become volatile, triggering a disorderly adjustment.

“The current account deficit is bound to stay high, driven by high capital imports and high investment demand. The weak and subdued demand for Kenya’s exports in its traditional European markets will remain a dragon in Kenya’s current account, as the Eurozone battles recession,” the minister said.

The reality of the matter is, Kenya is headed for a major fall. Perhaps this explains Uhuru’s desire to strengthen the EAC in hopes\ that Kenyans can find employment in other regions other than Kenya. The president understands that Kenya can no longer support her citizens and must act to avoid a total disaster.

Devolution

The government of Kenya seems to have this impression that the growth of the economy is dependent on their control of  all financial issues. The truth of the matter is only the private sector can increase the country’s prosperity. The government needs to stop fighting devolution and allow private enterprise . This is the solution to Kenya’s economic issues. The government must put 100% interest in starter companies and support all manner of investment opportunities.

If Kenya has to grow, devolution must be embraced and Uhuru and his cabinet must stop interfering with the process. The government of Kenya is not capable of providing for Kenya without the help of private investments.

 

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Categories: Business, Opinion, Politics

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