President Uhuru Kenyatta’s prime responsibility to Kenyan people is to provide at least 1 million quality jobs per year, create a low cost economy and provide security. In order to create quality jobs- that can support mortgage uptake, he must do a few things. He must facilitate lowering of bank interest rates to not more than 2%-age points above month-on-month inflation. He must build at least 150,000 low cost houses per year for tenant purchase so as to migrate landlord capital to industrial sector, assault high mortgage rates, create employment and help make better planned towns and infrastructure (industrial parks should be set up around the housing colonies). He may consider it very important to intervene in the budgetary process and work towards 50:50 sharing of development vote to recurrent expenditure in two years (international best practice is currently 40:60 but he can do better). This would stop wastage, corruption among public officers and align the wage bill with best practice. Currently only 15% of the budget is apportioned to development, forcing GoK to borrow from banks..…this has played havoc in the economy because it has driven interest rates to unsustainable levels, crowded out the private sector and therefore affected job creation in a very fundamental manner. Further on job creation, there are certain things that can be done immediately. The first being that all foreigners doing jobs Kenyans can do should be told to leave. Industrialists must be persuaded to provide internship ratio to college students like they do in Germany, to avoid the issue of ‘inexperience’ during job applications. The problem here is that most factories are owned by Kenyan Asians who treat Africans as spies. But with a resolute government this can be sorted out. The government can also build industrial parks targeting agricultural value addition. Additionally, all KTDA factories can be converted into export processing zones. This would create a lot of packaging, design and marketing jobs in the countryside. The same thing can be done for the coffee sub-sector and other farm produce. Look at it this way…were the GoK to intervene and pay KCB the kshs 600 ring-fenced at Treasury, the saga of KPCU would be resolved; and the farmers’ body would go after those that owe it kshs 4 billion, champion value addition at Dandora,Sagana and Meru mills and create a lot of employment. A fund can also be set up as sovereign guarantee to banks willing to fund importation of machines and plants by African industrialists. The Kenyan African is very poorly machine-endowed that is why he rushes to build houses as investment. This would deepen industrial ownership and create jobs. Much of this is about demand side of the equation. The supply side not as difficult as the President might think. Because he can arrange certain matters in a way that Kenya Revenue Authority (KRA) attains 85% compliance in under two calendar years. This would rake in kshs 2-3 trillion extra annually. This can be done by decentralizing stations, implementing mapping of properties through GEOCRIS,VAT withholding agency system (and income tax too),vetting of staff, respect of rule of law by prosecuting tax dodgers, purging graft, online ETRs, tax amnesty programme and tax payer education. KARIUKI MUIRI
Posted on: Mon, 17 Mar 2014 08:51:01 +0000
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