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Category Archives: Politics

Why the Cost of Living in Kenya is DAMN too High

Cost of living is high in Kenya because of high levels of taxation. The taxes are high because of the heavy debt servicing burden. All these are problems caused by Uhuru.

Something like Airtime and internet are taxed at 40%. Fuel is also taxed at over 40%. How are these global issues?

We are importing food worth over KShs 270 Billion yet the Galana-Kulalu 1.75 million acre land lies idle due to corruption and incompetence of Uhuru’s government. Are Zambia and Tanzania from which we are importing maize not part of this globe?

Uhuru’s government has killed our manufacturing sector. In 2012, manufacturing contributed 11% to GDP. Now it is contributing a mere 7%. Yet as per the big four agenda it is meant to be doing 20% by now.

The death of manufacturing is causing us to import almost everything. As a result, the shilling has depreciated a lot leading to imported inflation.

Fuel prices are high globally but we have Turkana oil which is being sat on by Jubilee thugs. We even have coal in Kenya which can be turned into diesel and petrol.

We have abundant electricity. The KShs 21 Billion being spent monthly on fuel subsidy is enough to import 4,000 electric buses. This would permanently resolve the fuel issue as far as commuter fares are concerned.

Only a visionary leadership can make such decisions. An incompetent leadership specialises in passing the buck.

 
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Posted by on July 6, 2022 in General News, Politics

 

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The GOOD, the BAD, and the UGLY of KENYA KWANZA MANIFESTO



I have finished reading the Kenya Kwanza Manifesto. The document is wordy and poorly edited so it takes a lot of patience to go through it.

As far as the content and the details are concerned I will begin with the good. The document makes a good attempt at understanding the issues at hand and does so using statistics. It also avoids making lofty promises which requires huge financing. While it makes an attempt at financing its promises, the estimated funding is based on guesswork. It is also unclear how the funds will be raised.

As far as the bad is concerned;
1. Overall the document is still very qualitative. While it mostly quantifies the challenges it fails in quantifying the solutions. Sectors such as manufacturing, tourism, water, energy, aviation, ICT have zero quantification when it comes to solutions and financing. One would have expected to get clarity on the much hyped Bottom Up economics but the document offers nothing

2. The manifesto does not identify corruption and looting of public funds as a challenge facing the country. It is silent on how this issue will be tackled. The people behind KK are known to be incredibly corrupt. It is no wonder that they make no attempt at tackling corruption. A KK government will certainly continue the current looting menace. At least that is the message I get from the document

3. The document identifies the issue of public debt but fails to offer even a single solution on how it will be dealt with. While it commits to reduce the budget deficit to 3% of the GDP by 2026/27 financial year, no clear detailed are provided on how to go about it. Anybody who promises you any economic progress without clarity on debt stabilisation is simply lying

4. On the agriculture sector the proposed solutions are underwhelming. It fails to appreciate the fact that rain-fed agriculture is no longer sustainable. To make matters worse a KK government will no longer invest in large scale water projects such as dams. Shift will focus to community water projects. Large projects will be done under PPP model. This would amount to privatisation of water which ought to be a non-negotiable public good. The promise to commit KShs 50 Billion annually to the sector is good but there are no details on how such funds will be deployed. The proposed Minimum Guaranteed Returns is utopian and there are no details on how it will be achieved without making the cost of food expensive

5. The much hyped KShs 50 Billion per year Hustler’s Fund is also not detailed. It is unclear how the cash will disbursed

6. The proposal to increase housing supply by 250,000 annually is overly ambitious and vague. Even at a cost of KShs 3 million per house, this would amount to KShs 750 Billion annually. There is no possibility of raising such funds either privately or publicly. The government needs to invest in public housing for renting at affordable rates. Saying that funding for this will come from pension funds doesn’t make sense because the government cannot direct them on how to allocate funds

7. KK promises to hire 116,000 teachers in two years. No cost has been provided. The average pay per teacher in Kenya is KShs 741,823 per year. KK will need at least KShs 86 Billion to achieve this goal. The Alliance promises nothing in reducing the cost of education in the country. There is nothing even about the HELB loan reliefs something they have been promising in political rallies. They don’t mention CBC despite promising to scrap or reform it in rallies. They only talk about reforming the exam based system

8. On ICT they promise to lay 100,000 km of fibre optic cable. They forget that over 95% of broadband internet in Kenya is accessed via the mobile phone. They don’t even mention the word 5G. A promise is made to lower the cost of data and calls but nothing specific is mentioned especially with regard to the heavy taxation on these items

9. There is nothing revolutionary in the document about the healthcare sector. The proposal to raise KShs 200 Billion annually for universal healthcare lacks clarity because it is unclear how the informally employed will pay up. Besides, if all the funds in NHIF, MoH and County government health budgets were combined we could easily setup an organisation to run all public hospitals and offer free healthcare to all

10. The document says nothing about the extractive sector in the country. Nothing is said about the oil and gas sector or the mining sector. This sector carries the potential to double or even triple our GDP. How it can be omitted in a manifesto beggars belief

11. Regarding the energy sector, the document fails to make any tangible promise on how to lower the cost of power or by how much. The only positive thing here is the promise towards fast-tracking the electrification of our transportation system as a way of dealing with high petrol prices. Their proposal to set up infrastructure for Liquefied Natural Gas for power generation makes no sense since we have enough geothermal power generation capacity. No mention is made of the exploitative IPPs or the huge system losses which have made power unaffordable

12. While the document deeply reflects on the potential of our tourism sector, it falls far short in proposing how this vast potential will be harnessed. No funding commitments are made especially towards marketing

13. The document also does not mention anything about parastatal reforms or how the privatisation initiative will be accelerated. This is a critical cog in generating government revenues in view of diminishing taxation capacity. It should have been addressed in details

14. Not a word has been spared for our capital markets. Capital market reforms are needed to provide a cheaper way of financing enterprises and enhance wealth distribution

The ugly thing about the KK manifesto is mainly about the people behind it. These people have no known history of running public affairs with integrity. They have perfected the culture of lying to the public such that it is impossible to believe any promise they make.

The 2022 election makes for a hard choice. None of the two major political formations understands the burning economic issues of the day. None has a clue on how to stabilise the public debt and revive the economy. Stabilising the debt and reviving the economy are more important than any promise any politician can make. We are in a deep economic crisis. Nothing much will happen unless this is tackled deliberately and decisively.

© Ephraim Njega

 
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Posted by on July 3, 2022 in Politics

 

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Azimio’s Manifesto issa disturbing Load of CRAP

REVIEW OF AZIMIO MANIFESTO: 12 DISTURBING ISSUES.

I have just finished reading the 84 page Azimio Manifesto and it is quite underwhelming. It finally confirms my worst fears that the Azimio team is completely clueless on how to address the challenges we are facing. I know those who are politically possessed will think this opening remark is biased and harsh. It is not. In fact I am quite generous in my assessment.

The document is full of qualitative narratives and it doesn’t quantify or provide any timelines for the promises made. This means that it will be impossible to hold Azimio government to account if they take power. The few issues quantified are quite concerning because they haven’t been financed. There is no explanation of where the money to fulfill these promises will come from. I will give the following examples;

1. Azimio promises to increase county government allocation to 35% of shareable revenue. This translates to KShs 749 Billion as per the Division of Revenue Bill 2022 which puts the shareable revenue at KShs 2.1 Trillion. The Bill has currently allocated KShs 370 Billion to the counties. Where will the additional KShs 379 Billion come from?

2. Their Inua Jamii project will transfer KShs 6,000 monthly to 2 million poor households. This translates to KShs 144 Billion annually. Karua told a local media station that the Azimio government will fund this from the KShs 800 Billion it claims will be saved from fighting corruption. This is pure fantasy and delusion

3. Azimio promises free education from ECD all the way to the university. The education budget is currently at KShs 463 Billion. How much will it cost to offer free education to all?

4. Azimio also promises to employ all currently unemployed teachers. Another unquantified and unfinanced promise. No numbers are given on how many teachers are currently unemployed. No need assessment has been done to determine how many teachers are needed. In just one quarter I saw TSC has registered over 15,000 teachers. You can imagine the numbers of unemployed teachers

5. Azimio promises to connect all houses to water. No numbers are given on how many houses will need to be connected, at what cost and within what timelines. They just say it will be done progressively. One would assume they will do it in five years since that is the duration their term will run. How possible is this?

6. They promise to increase the share of agriculture to 30% of GDP. These are absurd figures. Before the rebasing of the GDP in 2020, the share of agriculture to GDP was over 34.1%. In developed countries, the share of agriculture to GDP is usually less than 10%. Someone talking about increasing the share of agriculture to GDP doesn’t know what they are talking about. Quality economies are created by increasing the share of Industry and Services to the GDP

7. They also promise to raise the share of manufacturing to 30% of GDP. Raising the contribution from 7.5% to 30% in 5 years would require more than a miracle. They need to provide very comprehensive details on how such a miracle will be achieved. None has been provided

8. On lowering the cost of power, they promise to reduce system losses from 23% to 10% by strengthening the grid. This promise fails to appreciate that system losses are both technical and commercial. What we need most is an audit of these system losses because some are being caused by corruption. You can’t just focus on the technical side of the equation.

They also promise to “Invest in additional generation capacity at a lower 15% cost.” This is a vague and incomprehensible statement. The Azimio team fails to address the thorny issue of IPPs and lopsided PPAs. Unless and until this is addressed, the promise for cheap power will remain a pipe dream

9. They promise affordable quality healthcare but no details are provided on what it will entail or how it will be financed. They also promise that retired civil servants will continue to enjoy medical cover at the expense of the government. How will this be financed? Imagine all those senior people in government with hefty medical covers continuing to drain the government all their life? Why not just make healthcare affordable to all?

10. Another issue close to my heart is that of Affordable Housing. The Azimio team has not made any promises on number of houses that will be constructed. They have just made qualitative and generic commitments

11. They have made a commitment to “Implementing minimum guarantee returns to our farmers.” This is another loaded promise that needs to be quantified and described in detail. How will it be funded or actualised while keeping cost of living down?

12. On the monster that is public debt, the document trivialises the issue by saying they will restructure the debt and seek debt forgiveness. Our costliest debt is domestic debt. How will they restructure that or seek forgiveness without destroying the financial system? They also promise to create a Debt Management Office. We already have that and it hasn’t helped in any way.

The issue of public debt is about the huge budget deficit we have been running. To deal with debt you need to raise revenues and lower expenditure. This is to be done such that the revenues grow at a much faster rate than spending. There is no shortcut to dealing with this issue. Lowering the budget deficit to acceptable levels will cure the debt problem in a sustainable manner.

The expansionist promises Azimio is making betray a serious lack of understanding of the fiscal predicament we are in. If they implement these proposals as promised, the public debt situation will worsen.

We as voters need to hold these politicians to account. If someone is not serious about the promises they are making, how will they run government if elected? How will they address the challenges we are facing if they do not understand them?

Please let us avoid politicising this issue. If this economy collapses we are all going to suffer regardless of which political side we support. As and when UDA releases their manifesto, I will also review it objectively.

© Ephraim Njega

 
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Posted by on June 8, 2022 in Politics

 

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