Protectionism is Hurting Tourism in Mombasa

Protectionism is hardly a good thing. The tourism sector in Mombasa is suffering because the government has refused to allow international airlines to increase frequencies to that city.

Many airlines have applied for direct flights to Mombasa which would assist in growing the number of tourists coming to the region. The government has been dragging its feet in order to protect KQ from competition.

The same scenario is playing out in the horticultural subsector. Flower farms are having to throw away flowers due to limited cargo capacity. The government is unwilling to allow more airlines to do cargo in order to shield KQ from competition.

These are two sectors which contribute a lot to the economy. They create jobs and deliver the much needed forex. The policies of this government continues to kill the economy. The sooner this regime is gone the better for everyone.

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Posted by on July 4, 2022 in General News


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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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What’s Happening to Keroche Breweries is more than Meets the Eye

Keroche Breweries CEO Tabitha Karanja might be caricatured as the poster girl of tax evasion in Kenya, but the Keroche tax issues are more than what the media portrays.

This is how and why our manufacturing sector’s contribution to the GDP has fallen from 11% in 2012 to 7.2% in 2021. Yet Jubilee promised to increase it to 20%.

The issue about Keroche is not even about the weaponisation and politicisation of the tax machinery. It is not about whether she should pay taxes or not.

It is about the insanely high levels of taxation in Kenya and the complicated taxation system founded on colonialism. A beer costs the equivalent of KShs 100 in Uganda, KShs 60 in Ethiopia. But in Kenya it costs over KShs 200. Taxes in Kenya are higher than the price of the beer in other countries.

The alcoholic drinks tax code is insanely complicated. But this is deliberately so to facilitate extortion and frustration of local industrialists.

No industry can thrive or survive in such an environment. Tabitha is fighting a lost battle. Former manufacturers moved on long ago. They import everything from China branded with their Kenyan brand names.

Even tissue paper comes from China with local brand names. That is why you are groaning about its rising price.

This is what we should be discussing. But we are possessed and obsessed with politics. This is why we will never discuss the real issues. We are always blinded by politics. The politicians know this all too well. In their defense, we will support our own oppression.

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Posted by on June 21, 2022 in Business, General News


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