There is a lie that you are about to start hearing a lot of, now that the President's campaign has gone into overdrive, so let us clear a few things here and now.
It is now clear that one of the major campaign strategies of President Kibaki's re-election campaign will be the dramatically improved performance of the economy. Zambian President Levy Mwanawasa has just won re-election in a closely contested campaign that was heavily pegged on the improved Zambian economy.
Let me just add here that it is time Kenyans refused to be intimidated into silence during debates an discussions on the economy. As economists vomit their per capita, GDP, GNP etc figures, there is nothing wrong with non-economists talking about the unfulfilled election pledge by Kibaki's campaign team of achieving 500,000 new jobs a year. There is also nothing wrong with ordinary folks asking the simple question; if the economy is doing so well, then how come most Kenyans are doing so badly?
To understand what has been happening to the Kenyan economy, it is important to go back to the year 2002. In the run up to the elections, there was a lot of anxiety and very few people believed that it was possible for there to be a peaceful transition of the opposition won the election. Many big businesses were busy getting money out of the economy to reduce their exposure should anything go wrong.
After the victory of Narc, there was lots of hope and renewed confidence in the stability of Kenya. But nobody quite expected what followed. There was actually such heavy investment into the economy from Kenyans working abroad. The money just kep pouring in hard currency, to finance mainly construction projects.
Funds from money laundering also poured into the Nairobi stock exchange and other investment instruments (no wonder the government is dragging its' feet passing any anti-money laundering laws). This coupled with other traditional strong performers like tourism all combined to strengthen the Kenyan shilling to such an extent that some exporters, most notably the horticultural industry and sections of the tourism industry started feeling the heat of a strong Kenyan shilling.
Well, you can't win them all, what resulted were massive layoffs in the horticultural industry and there is now clear evidence that many big players have started looking at the possibilities of relocating some of their operations to other neighboring countries, most notably, Ethiopia.
But the real benefits of a strong shilling were fully appreciated when oil prices hit the roof and yet there was minimal negative impact on the Kenyan economy.
To date the shilling has continued to defy all predictions of it's ever weakening substantially.
The real heroes of the Kenyan economy are not the government or some brilliant economist President. If anything, the government has done everything to get in the way. Political squabbling and continued corruption in high places have hurt the country and kept away major investors.
The real heroes of the Kenyan economy are ordinary Kenyans who when the opportunities have dwindled at home have ventured into foreign countries all over the continent and beyond. In fact foreign exchange inflows from Kenyans abroad are now widely believed to be the number one forex earner. Those who have remained at home have turned to Saccos and raised money, which they have re-invested in all sorts of businesses and projects across the country to keep food on the table for their families. Ordinary Kenyans have done this against a backdrop of deteriorating security and rapidly rising crime. Gallant Kenyans have also achieved so much despite government policies that are insensitive and actually against the small business – the biggest creator of jobs in the world.
Well done Kenyans. You have proved that you don't need handouts. All you need is a government that creates a genuinely enabling environment and then you can make your own opportunities.
Kenyans are like ace Arsenal striker Thiery Henry, all they need "to score" I half a chance.
Quick Question:
How is it possible that the government was unable to finance Charity Ngilu's sweepimg healthcare reforms, about a year ago but are now able to finance free healthcare for millions?
Answer: It is the coming general elections, stupid.
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See also the 2 Problem Tribes in Kenyan politics
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ReplyDeleteI just posed a question on my blog on what was really happening in the kenyan economy --5.8% projected growth, but people are not feeling it.
You offer an interesting explanation and it is clear that kenyans in the diaspora have become an economic lifeline for the country.
Please provide more commentary on my blog on this issue. kenyanentrepreneur.com
cheers
NAIROBI (Reuters) - Kenya's stock market hit a record closing high on Thursday as the east African country's buoyant economic growth and its appetite for new listings fuelled a bull run on the Nairobi bourse.
ReplyDeleteNairobi Stock Exchange (NSE) closed at a record 5,061.77 points, propelled by strong economic gains, traders said. Kenya's economy expanded by 5.8 percent in 2005 compared with 0.6 percent in 2002, according to central bank statistics.
The highest level the NSE 20 share index had hit before was 5,030 points on February 18, 1994, when the market anticipated an influx of foreign investors, traders said.
But Kenya's economic growth since President Mwai Kibaki took power in December 2002 has done little to ease poverty in the country, an opinion poll showed in July.
"The stock market has been bullish for the last three years because the economy has been doing well," Mohammed Hassan, the executive director at Dyer and Blair Investment Bank, said.
"Earnings have been great across the board and the market believes that these earnings are sustainable going forward. That is what has been causing the bull run."
The NSE is small by international standards but one of the busiest markets in sub-Saharan Africa. It was recently boosted by the flotation of the Kenya Electricity Generating Company (KenGen) and advertising firm Scan Group.
Both were massively oversubscribed in a sign of pent-up public appetite. Starved for quality investment opportunities, Kenyans have increasingly turned to the bourse where prices for most stocks have risen steadily for the last three years.
The market attracted new investors including rural Kenyans who sold land and cattle to finance their share purchases.
On Wednesday, Kenya's President Mwai Kibaki launched an automated trading system at the NSE, which traders said has increased daily transaction volumes tremendously.
"It shows the confidence investors have in our market," said Fred Mueni, assistant general manager at Suntra Investment Bank.
"It also shows that the real economy out there is growing, that something is happening. The challenge we now have is to see whether we can sustain the prices."
The index added 98.55 points on Thursday, spurred by gains in financial and investment companies.
Barclays Bank of Kenya was one of the biggest gainers, closing at 469 shillings from 389 shillings at the close of trading on Monday.
ICDC Investments, which last Thursday proposed a ten-for-one share split, saw its share price rise 10.5 percent from the closing price on Wednesday, to 453 shillings.
Announcements of stock splits in Kenya have traditionally caused a rise in price, rather than a decline
Before God we are all the same. I am a Kikuyu with a Luo Man and he treats me like a Queen. Amazing. So you Kikuyu Men be ashamed.
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