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The Luke Admirable Economic Growth Index Special Feature
In honor of one of our disgusted readers and regular commentators, Luke, I launch today the Luke Admirable Economic Growth Index Feature. This will consist of case studies to illustrate the admirable and dramatic economic growth rate that the country has enjoyed under the Narc Administration.
KTN lunch time news, I am reliably informed has just reported a bizarre case in Luo Nyanza that will bring tears to the eyes of even the most hardened of hearts. A starving impoverished Kenyan mother who has a lame disabled daughter said to be about 17 years old received cash from a stranger in return for allowing him to defile her daughter. The KTN clip showed the girl dragging herself in the dirt (she can't walk) while trying to fend for her newly born toddler—the result of the paid-for defilement. A woman on the scene asked the million-shilling question; how can she look after a child when she can't even look after herself?
Cases of pimping are rampant in places like India where the poor husband goes round student hostels offering his wife for sex in exchange for cash to put food on the table. The man then humly waits outside as some sex-starved student ravages his wife. REALLY SICK!!! But it seems that this practice is rapidly slipping into Kenya as well as our countrymen get more and more desperate amid the rapid economic growth. This is yet more evidence confirming the admirable and unprecedented-in-many-years economic growth that the country has achieved over the last few years.
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Remember the controversial rise in sugar prices, which everybody has forgotten about now? Well, the price never went back to its' previous levels and has now settled at around Kshs 90 per kilo (about 30% higher than where it was before all hel broke loose. But it set to rise yet again to about Kshs 95 when the new Amos Kimunya excise tax on polythene paper products takes effect in October.
Will somebody explain to me where this extra mark-up is going? Is it to those notorious middlemen, mainly based at the Coast? It is certainly not going to cane farmers, many of whom are very frustrated now.
Alas, the fact that many impoverished struggling jobless Kenyans can NO LONGER afford to take solace in at least a cup of tea, if nothing else, at the end of a hard day is yet more evidence confirming the admirable and unprecedented-in-many-years economic growth that the country has achieved over the last few years.
Appeal to our readers: Have you noticed a recent case that illustrates the admirable Kenyan economic growth rate—in the way Luke admires it? Please post your observations here in the comments section below, or if you want it to be a main post kindly email to the editor at umissedthis@yahoo.com mark clearly in the subject area the words; Luke Admirable Economic Growth Index Special Feature.
The photographs Kumekucha feared to publish.
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Chris, you mean LUKANOMICS. Not much has been achived and if you talk of sugar, it is a sorry one. In the UK, sugar, a product imported from Africa (Kenya has a quota to supply EU)is sold at a price less than that in Nairobi or to make in painful, Shibale or Mumias Town.
ReplyDeleteKenyans need only look at the rash of properties transforming the capital's skyline for proof of the country's economic resurgence in recent years.
There's more demand than we can meet. People can now afford housing because of low interest rates
One developer, who two years ago employed 15 people and now has 200 on his payroll.
The boom is there.
Construction is not the only sector that's booming in Kenya.
The east African country raked in more than $870 million from tourism in 2006 -- catapulting the industry in front of horticulture and tea as its biggest foreign currency earner -- and expects revenue to top $1 billion this year.
Manufacturing which accounts for about one-tenth of gross domestic product also chalked up gains, growing by 6.9 percent last year, while agriculture -- representing a quarter of GDP -- expanded by 5.4 percent.
Kenya has been on the path to economic recovery since President Mwai Kibaki's government came to power in 2002 and growth was just 0.6 percent.
The government will be keen to capitalise on Kenya's improved economic performance as it seeks re-election this year, boosted by the central bank's projection of 8 percent growth by 2008, rising from at least 6 percent this year.
The benchmark 91-day treasury bill rate dropped to 6.345 percent at the latest auction on Thursday, from 8.732 percent on July 4, 2002.
But critics say the figures reflect a mere correction after years of decline under Kibaki's predecessor Daniel arap Moi whose legacy of mismanagement and entrenched graft are blamed by analysts for ruining an economy that was once the envy of the region.
Businessman are credited for Kenya's entrepreneurial spirit for driving growth.
It's got much less to do with the Kibaki government than the government would like to think.
We're getting 5-6 percent with the most appalling infrastructure. You would have to go out there with a mallet and deliberately damage the economy in order not to get 5 percent growth.
Others say the government's achievements have been patchy with slow progress to uproot corruption that has cost billions of shillings in lost revenue -- money better spent on health, education and repairing the crumbling infrastructure deterring foreign investment.
What we could have earned in terms of dividend (from fighting corruption) was not there. Opportunities for growth have been lost.
Despite the criticism, some private sector players gave the government marks for some progress in its privatisation drive and reducing the licences required for foreign firms to set up.
I give the administration a lot of credit because they did create an enabling environment.
The flotation, the government's first, was more than three times oversubscribed. It was followed by a secondary share issue in sugar producer Mumias and plans to sell a 40 percent stake in Kenya Reinsurance this year.
However, Agarwal said there was room for improvement.
I think the government ought to be bold. I would like to see it speed up the process of getting out of Mumias, KCB, Kenya Airways. Don't just sell 5, 10 percent -- sell all of it and use that money to further the social agenda.
Some Kenyans fear the country's economic growth has done little to alleviate poverty plaguing most of the 36 million population -- rather it has only served to sharpen the divide between the haves and the have-nots, they say.
What worries me in the middle- to longer-term is this massive disequilibrium between the very rich and the other side of the fence.
A lot of people have nothing and nothing to lose, but except an upsurge in carjackings, beheadings and other violence this year.
Businesses complain that Kenya's chronic insecurity weighs heavily on costs with firms, hotels and shops being forced to spend on protection from private security guards.
For some voters the fruits of Kenya's growing economy are already there to be enjoyed.
Samuel Ndumia, whose roadside fruit and vegetable stall stands in the middle of an up-and-coming Nairobi suburb, said business has doubled since the government came to power.
I would vote Kibaki again because I have seen a difference. We have street lighting and that helps us sell for longer in the evenings.
Roads have been repaired ... rubbish is collected from dumps. For me, it's the small things that have changed that matter.
Thanks Chris! I know though that the real honour of this feature is rightly bestowed first of all on Kumekucha, who as Taabu aptly described is" the richest Kenya host by endlessly satisfying all intelectual parasites who unfortunately leave very little (infact nothing) in return" the true value of this blog has been the debate it has brought out in getting us to think differently about our country Kenya and our people Kenyans
ReplyDeletesecondly the honour goes to our great country Kenya and her children our people, all 42 tribes who deserve alot more better treatment than they has gotten so far and yet have had more than their fair share of bad choices made all in the name of service and the line of duty. For shame that this has continued for so long, even till today when some people feel that all is fairing quite well and why do some pumbavus like me keep speaking about only the bad and not the good that has taken place in the past 5 years
let the words of Prof. Michael Porter set the game afoot "
"the country’s economic growth has coincided with an upswing in the world economy and it would be wrong to assume that it would be maintained"
in other words, bado mapambano...oh sorry, i forgot...some kenyans don't like listening to anyone who just happens to know a thing or two that they don't...it happens to Chris here all the time
Chris, am quite interested in learning more about this sugar topic from your large pool of contributors. Sugar is supposedly a sweet product but here in kenya, it has left a bitter taste in the mouths of citizens.
ReplyDeleteThere is the sugar that is produced locally and then there is the imported product, also known as "white gold". Both serve the consumer alike, only that strangely, their prices differ greatly- and the imported one comes in excess ship loads each time a general election is around the corner. We've also been told repeatedly how much the economy has grown and that agriculture has been the main driving force behind this growth.
Looking at the locally produced sugar, it still beats me that the sugar farmer who supplies the raw material is grumbling. He has to wait nearly two years before he can make one harvest, and after making the final delivery to the mill he has to wait again for at least 30 - 60 days before he can receive payment. Remember, before this he had to take an interest attracting loan to buy ferliser and to till his land before he planted the sugar. The farmer is additionally over burdened by heavy taxation levied on the "sugar chain". Next in chain, the miller has been forced to sign performance contracts, just like all public servants, but he is additionally expected to undertake a host of social economic activities so as to benefit its staff and the local communities living in the zone, but at the same time meet profitability and performance targets set by government. The miller also pays a develpment levy / cess to the local authority. Next in chain are the traders, ie distributor, wholesaler, retailer. They also do not seem to be happy. One, locally produced sugar is supplied erratically and in short in most cases. Two, they have to compete for the market with imported sugar, which in most cases retails at much less than sukari yetu. There are thousands of indirect dependants of the industry providing a wide range of logistical and professional services to the players in the sugar industry.
In comparison Chris and just for illustration purposes, a typical Miraa farmer does not, unlike his sugar counterpart, pay 18% VAT, 7% Sugar Development Levy, 2% presumptive income tax, 1 % cess to local authorities and additional levies to outgrower companies. In total, a total tax burden in excess of 28% VAT. And when the the same sugar farmer buys sugar from Nakumatt, he pays another 16% VAT on the same sugar he had planted in his own farm 2 years ago. You will be aware that Miraa / khat is a banned drug and is viewed unfavourably by both the WHO and FDA and even one Kenyan boxer embarrased the country when he was the first athlete to be expelled from the last olympic games by the IOC for testing positive for banned drugs when traces of miraa were found on his specimen. The boxer owned-up later saying he only had chewed "half a kilo of kangetta miraa, some BigG and patco sweets" just a day or two before leaving Nairobi. Miraa has also contributed to many socio-economic problems in the areas it is grown, including high school drop out rate, spread of HIV as well as serious health problems for the people who consume it.
The sugar farmer cannot uproot the sugar crop and venture into other agricultural activities and the miller must keep milling just as the traders must keep trading. This industry has been accused of inefficiency but if truth be told, the industry will never do better if they are not operated like all commercial businesses. Government knows that farmers and local communities are also voters and it will please these groups first before looking to solve problems in the industry. In the sugar chain, only the trader can manipulate prices - as the miller's price is controlled by an industry watchdog. Can the consumer really choose to have sugarless tea?
Questions are:
-Why levy heavy tax on local sugar when it is an industry known to support millions of Kenyans? Millers dont collect taxes like KRA, but they support central government by undertaking to 100% build and maintain hospitals, roads and schools in their respective areas.
- Sugar has capability for alternative energy sources in electricity and gasoline. One wonders why the industry is being deliberately strangled by government when it certainly deserves full attention from government in order to give Kenyans its full potential. Very bitter after taste indeed.
-Why does kenya government support the cultivation and marketing of miraa while at the same time turning ablind eye to those bhang farms around Mt. Kenya forest and Western Kenya, when these are drugs which dont bring any revenues to the exchequer and their negative effects well recognised? Kenya as a country is internationally "acclaimed" as a net exporter of Khat and Bhang. (I dont want to mention what drugs, if any, transiting through Kenya).
Sugar farmers and millers dont mind paying taxes, but they surely expect to be pampered the same way horticultural produce players are pampered, or be left alone the same way miraa and bhang farmers have been left alone.
Bloggers will be astonished when they go to Busia, Muhoroni, Miwani and even Ramisi areas where you will meet peasants with stories of misery, abject poverty, disease and illeteracy. The latter is slowly creeping back after sustained near elimination in the 1980s and 70s. These peasants are what some bloggers here prefer to call errand boys, stone throwers and lapdogs. How sad.
On the other hand Chris, our sugar importers are in big business minting billions of shillings with each shipment docking at Kilindini harbour. Truckloads leave mombasa duty free, as they are bonded and presumed for export to Uganda, DRC and Rwanda. But when the same trucks pass the border point at Malaba, they are now loaded with sackful of sand because the duty-free sugar was unloaded at a godown somewhere off enterprise road in Nairobi and will be on supermarket shelves in town even before the sand trucks have reached Nakuru. It is also the only way to beat Kenya Sugar Board and KRA at their own game. It is a game played by well known sugar daddies but they are better left alone because they finance general elections campaigns and contribute generously in fund raising events. (Chris, I beg you please dont abandon journalism for sugar trade!)
These are the games that have made consumer sugar prices to escalate from a kilo average of Kshs. 45/- in 2002, to Kshs. 70/- in 2005 to 125/- in 2006 and back to Kshs. 95/- (presently) in 2007. It is hurting the consumer so much because sugar is not just used directly in tea and porrige, but is also used to make many other consumer goodss and a rise in sugar prices means a rise in most consumer items.
Which begs the question, ON WHOSE SIDE IS THE GOVERNMENT ON?