Economy Needs Solutions That Are Long Lasting

Business Daily (Nairobi)

Harrison Ikunda

14 June 2011

opinion

Finance minister Uhuru Kenyatta last week presented budget proposals that have been hailed as pro-poor. I have read Kenyan newspapers hailing what they call a poor man’s budget.

However, I have serious concerns and reservations having travelled around the country in the last six months and interacted with many people. Kenya simply has a long way to go.

Looking at Kenya’s population growth vis-à-vis the economic growth, the nation has so much to worry about. Though there have been significant changes since December 2002, the East African nation is still struggling. In about 20 years to come it is estimated that the Kenyan population will likely surpass the 60 million mark.

The mere poor exploitation and management of economic resources, poor capital formation and continued loss of opportunities available make Kenya’s story a sorry one. Unlike developed nations , Kenya is quite far below in economic fortunes that her people are living in dire poverty and may continue living like this if significant measures are not deployed.

The minister may have done his best in the circumstances to cushion the poor and ease the pain, but history has shown that these measures are ephemeral. The solution lies in deft strategic measures. To start with, there is no good reason why Kenya should not be able to produce enough grain and other foods to feed her people. As an example Malawi, a very poor African state has just proven how this is easily doable.

Implementation

It’s shameful that some ministries have not been able to fully utilise last year’s budget due to poor absorption rates and of course weak planning or poor implementation.

Infrastructure and some strategic investments in Information Communication technology (ICT) and tourism are sectors needing more efforts to get them off the ground. Kenya may still be significantly an agricultural state, but we all know the inadequacy of relying too much on agriculture.

In a nutshell agriculture needs a rejig and better planning and investments but the nation should accelerate investments in roads, airports, ports, energy and manage the telecommunications sector better. The costs of energy in Kenya are a dis-incentive to investments and a great contributor to the high costs of living.

Moreover sectors like ICT and Tourism have barely been scratched on the surface. The enormous potential in them is critical and needs to be exploited. Indeed the size of Business Processing Sector (BPO) in Kenya is currently too little. Receiving about one million foreign guests annually for a country like Kenya is like a bad joke. The trick is investments and investments, more so in infrastructure and governance. For Kenya governance has been a problem and corruption the celebration of governance gone awry.

The writer is a consultant.

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