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KISERO: Ours is a chronically weak economy that posts growth but doesn’t work
What you need to know:
- A comprehensive analysis of the broad economic trends would not fit in this space. Nor would it be helpful to cram the column with boring statistics about GDP growth rates, fixed capital formation, labour productivity, inflation trends, the exchange rate trends, or any other measures of quantitative development.
- In Nairobi’s central business district, the formerly ubiquitous shops owned by Kenyan Indians are disappearing and being replaced by 10 by 10 kiosks, selling un-customed clothes, footwear, mobile phones and computers, which invariably will have been brought into the country through Kismayu or Eldoret Airport.
- The discovery of oil in Turkana may change the economic fortunes of the country in major ways. In the absence of anything new and dynamic to drive economic renewal, all we will be seeing every other year are statistics showing the growth rate moving up and down in decimal points, depending on how much rain the gods gives us.
Kenya is 50 years old as a free nation, an opportune time to look at the changes taking place on the economic landscape.
A comprehensive analysis of the broad economic trends would not fit in this space. Nor would it be helpful to cram the column with boring statistics about GDP growth rates, fixed capital formation, labour productivity, inflation trends, the exchange rate trends, or any other measures of quantitative development.
What is needed is to flag a few broad trends about quality of life issues: the fundamental changes happening under our very noses, but which we refuse to notice or recognise as the enduring trends of our times.
In truth, ours is a chronically weak economy that has often succeeded in posting high growth, but still struggles to meet most of the demands of the ordinary citizen.
We have had quantitative growth, but not qualitative development. Fifty years later, our economy’s biggest weakness is its inability to provide decent jobs for its citizens. More than ever before, many Kenyans are having to put up with low-paying, low quality jobs.
Today, most of the workers in Nairobi’s matatus or buses going to work in the morning will be hair-stylists, fitness instructors, disco bouncers, employees of companies offering cleaning services, and people who work where cars are washed using pressure machines.
The majority will be motor vehicle mechanics, workers in M-Pesa outlets, employees of call centres, telephone repair shops, or shops offering photocopying and document binding services.
Indeed, M-Pesa shops and car-wash businesses have sprouted in very corner of the capital city.
In Nairobi’s central business district, the formerly ubiquitous shops owned by Kenyan Indians are disappearing and being replaced by 10 by 10 kiosks, selling un-customed clothes, footwear, mobile phones and computers, which invariably will have been brought into the country through Kismayu or Eldoret Airport.
Today, every other town in this country has a “Garissa Lodge” — jargon for shops selling un-customed goods, clothes, footwear, computers and mobiles.
QUALITY OF JOBS
Every so often, our economists reel out statistics showing how hundreds of thousands of jobs are created in the informal sector. But do we even pause to ask about the quality of jobs in the informal sector — working conditions, working hours, or the return on effort?
The truth is that work in the informal sector is characterised by maximum physical exertion, inhuman working hours and meagre returns on effort.
What can you say of an able-bodied hawker, who walks hours on end from bar to bar in Nairobi’s Eastlands, his only stock of capital being a handful of second-hand sports shoes and T-shirts? It is just another form of joblessness.
The other day, we all stood in awe when hawkers fighting over control of the Dandora dump-site in Nairobi started exchanging gunfire.
Even though the evidence may be anecdotal, there would appear to be a direct relation between informalisation of the economy — the explosive growth of slums, the matatu culture, the hawking menace — and urban insecurity.
Policy must seek to eliminate this sector so that we can move citizens away from the beastly working conditions to sectors that can offer decent and durable jobs.
There are several other trends I find worrisome. We have done very well in terms of jerking up infrastructure spending. We have a fairly strong financial sector, but the growth of public sector debt as a percentage of GDP is just too high.
BULGING WAGE BILL A WORRY
Our wage bill is worrying, and one waits to see the time when government spending will shift in a major way from consumption towards activity that can enhance wealth creation.
The discovery of oil in Turkana may change the economic fortunes of the country in major ways. In the absence of anything new and dynamic to drive economic renewal, all we will be seeing every other year are statistics showing the growth rate moving up and down in decimal points, depending on how much rain the gods gives us.
Kenya must discover new sources of economic renewal.
