RIGHTING WRONGS

BBI can drain Kenya swamp

It’s one way of increasing the size of ugali on the tables of impoverished families.

In Summary
  • Kenya  a swamp of debt, rising wage bill, disease, unemployment, ignorance, poverty and political idiocy.
  • Kenya is not attracting as much foreign investments as it should. Many are out of employment.

The message from critics of the Building Bridges Initiative is that it will not put food on the table. This view is cynical. BBI has the potential to put more food on tables for more Kenyans than the alternative.

The alternative is stagnation – a vicious cycle of poverty and conflict whose engine is political instability or a perception of it. A number of international investors fled Kenya in 2007-08 during the post-election violence. The flights could have been avoided. Future flights could be avoided by a simple enrichment of the BBI report.

The conflicts around 2017 presidential elections scared away investors. It was also devastating to many Kenyans. The repeat of this madness is possible if Kenyans remain indifferent. About 1,200 Kenyans were killed, and 600,000 were dispossessed. Businesses were vandalised. The owners were impoverished. Political instability scared food away from many tables. It was the worst case of mangled democracy.

Fidgety investors flee during elections. Some relocate because Kenyans have a tendency of getting mad every five years. Sometimes a countdown to an election sees Kenyans of Asian origin fleeing to Britain, India, or other countries that have with better political environments for investments. 

Instability also means tourist arrivals plummet. The hospitality industry employs millions of Kenyans. Tourism puts a meal on their tables, takes children to school, and pays for healthcare.

Political stability creates an enabling environment for investments. Investments put food on the table. Jobs generate taxable income, spur consumption, encourage savings and investments. The four are essential conditions for economic growth.

When you find yourself in a swamp, the more you try to wriggle yourself out, the deeper you sink. No one wants to stay in the mud longer than avoidable. Two things happen when you are stuck: You can stay stuck for eternity or you look for extra hands to drain the swamp or pull you out of the muddle.     

Political stability creates an enabling environment for investments. Investments put food on the table. Jobs generate taxable income, spur consumption, encourage savings and investments. The four are essential conditions for economic growth.

Kenya is in a swamp of burgeoning debt, rising wage bill, massive unemployment, disease, ignorance, poverty, and political idiocy.

There is the elephant in the room, which partisan minds don’t countenance. It’s political instability that visits every election cycle, or a perception of it. Perception can be as devastating as the reality.

Zimbabweans under Robert Mugabe needed wheelbarrows, they still do, to transport their currency to the supermarket. Not much has changed two years after his exit. The destruction of investments was profound. Investors fled, especially after white settlers were evicted their farms. International investors shunned Zimbabwe, with travel bans in tandem.

Massive unemployment drains incomes; denies state income tax and other sources of revenue; and drains consumption. There can be no investments without savings. Banks don’t have money to lend when people don’t save. Incomes produce savings.

Then consider Rwanda before the 1994 genocide, and Kigali under the stabilizing leadership of Paul Kagame.  Rwanda can attract foreign investments because of political stability. Employed Rwandese people can save, pay taxes, consume, save and invest. This is what every country needs to wriggle out of the swamp.

Kenya is not attracting as much foreign investments as it should. Many are out of employment. The many who are employed are too constrained to save or invest. Worse, they cannot borrow to invest because bank loans are expensive. Loans become expensive when savings are low.

Employment means four things: paying taxes, financing consumption, boosting savings, and spurring investments. China is the world’s international warehouse of assorted goods in part because of foreign investments. China’s perceived political instability, in spite of its novel autocracy, attracts international investors. Every country needs political stability to enjoy a competitive edge. Countries need injection of foreign capital to spur investments.

BBI is one way of increasing the size of ugali on the tables of many impoverished families. Recipients of wheelbarrows would buy their own, without relying on exploitative benevolence of politicians who use handouts to bait votes.