By Kariuki Muiri
I doubt the next 5 years under President Uhuru will be easy for Kenyans unless he is able to align Public Wage Bill (PWB) to the Gold-Standard 25% of ordinary revenue; which would save the country over kshsh 500 billion annually. It is this money that he would use to put measures in place to create employment because unemployment stands at 45% generally, which is double the average in the East African region, including Ethiopia. However, among the youth, unemployment is around 60%, according to various economic papers.
This money would be used to build Special Economic Zones (SEZ) around the country as affirmative action for the African industrialist (manufacturing in Kenya is racially one-sided which distorts prices,creating artificial inflation due to collusion among a few selected players in Cement,Steel,hardware and plastics among others). The SEZ would offer free 6-12 months rental space for start ups. The start -ups would be offered machinery on credit by Government-leveraged banks which would pay the suppliers directly,get the machines installed and hold them as collateral…even as the government guarantees the banks through a revolving fund from savings from the PWB. This measure would become seed capital of new-era industrialization where the youth would put their ideas into practice. It would not be surprising to see new industries growing in areas where cutting-edge technology would become the new normal like robotics, drones,micro-chips,mobile telephony,laptops, spare parts for electrical cars and jets, medical equipment,design of audio books and applications. In other words, there would be no limit. Additionally farm produce like Tea would be used to make base for medicine and cosmetics. Indeed agro -processing would also create thousands of jobs.
The other area where his government can save to create employment is fighting corruption.It was estimated by Mr Kinyua, a senior government official, that graft eats kshs 400 billion annually of our tax revenue. However, he did not include tax leakage which is estimated at kshs 300 billion annually. Last year, staff at KRA were taken to court over a scam of kshs 62 billion. Nothing has been heard of the progress of this case, however.
The building of the Mombasa-Nairobi superhighway can be postponed to build LAPSSET which is a vision 2030 flagship project which would open up northern Kenya, creating employment for thousands of Kenyans and easing pressure off Nairobi.
On interest rates cap, the government should be resolute and leave the caps in place; but supplement that effort by withdrawing from local borrowings. This would direct credit to the private sector and create thousands of jobs at a short notice. How would this be possible? The KRA can be targeted for reforms to seal tax leakage and introduce daily tax collections in the informal sector where 80% of the Kenyan workforce is employed. This is what they do in Turkey,a key best-practice tax jurisdiction. No less than kshs 400 billion extra would be collected annually. This money would be directed at growing the economy and creating jobs.
In summary, if Uhuru Kenyatta wants to leave a good legacy devoid of current political acrimony (which will create great turbulence over 5 years), he must do two things…create jobs across the country by growing the economy to vision 2030 standards; and solve political problems so that the opposition does not feel that taking part in 2022 elections is sheer folly due to excessive state capture of independent institutions like IEBC and Kenya Police Service.