Kenya is a country with great potential and can easily achieve the much-touted economic renaissance if, and only if, the new regime can reimagine and reengineer the concept of safety nets for purposes of attaining economic inclusion for the growing population of those in financial deprivation.
Compared to peers in Africa and beyond, it has been widely acknowledged that Kenya has a well-educated and versatile human capital that is endowed with skillsets that can easily be tapped when opportunities are availed.
In fact, Kenyans have excelled in different fields of engagement locally and in the diaspora, the testament of which is the millions of dollars that are remitted every month from across the globe. The latest figure for diaspora remittances being Sh42 billion for November 2022, according to the Central Bank of Kenya.
However, the current employment report by the Kenya National Bureau of Statistics indicates that a paltry 2.74 million Kenyans work in the formal sector and out of that population, only 310,884 earn above Sh100,000 per month.
The majority of the working population is in the informal sector, which involves back-breaking endeavours and whose remuneration is dismal. The latter segment is so informal so much so that even the Kenya Revenue Authority has had a herculean task roping most of them into the tax-paying bracket, majorly because those jobs are seasonal and unpredictable.
The distribution of Kenya’s income-earning population is thinly spread and as such there are more dependants than those working in the country. This has occasioned a helpless and hopeless segment of the population that has all but lost hope and their frustrations are palpable.
When statistics are presented about metrics such as economic growth, income per capita or even the inflation rate, this segment simply cannot understand what those are all about. Never mind that a big segment of these dependants hold diploma, undergraduate and postgraduate certificates.
Kenyans are wont to disparaging qualifications, and on some occasions, one hears people in respectable positions, which most got into because they were qualified, implore the unemployed graduates to create their own employment opportunities, which of course makes sense.
But there is so much generalisation because, with further inquiry, many of the graduates will have attempted setting up enterprises that never succeeded due to various dynamics. On the flip side, others will be seeking employment placement for purposes of raising seed capital for their ventures, and therefore focus must be on the creation of opportunities.
There is a new fad about technical and vocational training, which is a good idea. However, unless the segment is rationalised and optimised, we will be back to where we are with university graduates.
Let it not be misconstrued that technical and vocational training is the panacea to unemployment, far from it, because we have always had polytechnics over the years and therefore this is not a new concept, only that it is being granted new impetus and facilitation.
Kenya therefore urgently needs a robust and well-configured safety net system that will ensure equitable distribution of resources. It should not be the case that only the rich savour and enjoy the fruits of economic growth while the poor salivate and watch from the periphery.
The current government should streamline the disbursements to the elderly such that all who are eligible actually receive their money. The current set-up is so compromised, with officials cherry-picking who to register. In some cases, they register the elderly but who never receive a coin from the transfers. Therefore, a total review and overhaul of the process are required as a matter of urgency.
Secondly, the government needs to move with speed and identify other cadres of the population, such as the acutely disabled and households that are in abject poverty, and put them on a scheme of monthly stipends for purposes of meeting their basic needs. With a streamlined system, such intervention can mean so much in terms of evening out the gap between the social classes.
The cost of living has gone up exponentially in the past year and the government must seek to establish non-expensive mechanisms of food distribution to areas that are in constant dire need of food supplies such as Northeastern and parts of Eastern Kenya.
These should be proactively mapped out so that relief interventions are not knee-jerk, where the government hastily brings together captains of the private sector and the Kenya Red Cross to marshal contributions for relief. This is a call that the government has the wherewithal to face and surmount without any encumbrances.
Facilitating those in need to set up enterprises through loans from the Hustler Fund was a masterstroke. However, the operational efficiency of the fund is facing headwinds, what with the system taking days instead of the promised two hours for the algorithm to assign limits, which can be as low as Sh500.
And that after the deduction of savings and pension components, the remainder should be invested and produce returns within a fortnight, and repayment of the capital done pronto. And by the way, what background information forms the basis for creditworthy scoring with which the algorithm assigns limits?
Conventional loan products have a repayment cycle of one month and the government will do well to review the repayment time upwards to one month at a uniform rate of eight per cent per annum, not the current staggered rates where the latter two weeks attract 9.5 per cent per annum.
An increase in the amounts being disbursed should be considered so that amounts given make practical business sense not what is obtaining now, which appears to be hypothetical backroom postulations. The worst that the government must muster all efforts to forestall is massive non-performance of loans and the secret is in the terms of the loan product(s).
As we start the new year in earnest, the government must appreciate that the country faces myriad challenges, especially the pronounced cost of living and unemployment. These cannot be solved by ignoring or looking aside, but rather by evaluating and facing them head-on and putting together cogent resolution measures.
Holds a PhD in Project Management and comments on topical issues
