The best way to fund youth enterprise
What you need to know:
- More than Sh2.4 trillion of private capital is locked up in brick-and-mortar for obvious reasons – returns on capital, and for the purposes of tax evasion.
- The only way to do it, is for the government to invest annually in building low-cost homes for tenant purchase ownership – like 500,000 units yearly costing from Sh500,000 to Sh1.5 million.
- But is that all? No. The government would have to build industrial parks next to the housing colonies and link the parks to Lapsset and SGR.
I have noticed increasing urgency on the part of President Uhuru Kenyatta to try and create jobs for the youth, at least if for nothing else, to prepare himself for the 2017 electoral contest.
His government has launched many funds meant to tie up groups into the funds, more a campaign plan than anything else.
However, for the slightly over three years left, I believe a more structured plan would fare better.
More than Sh2.4 trillion of private capital is locked up in brick-and-mortar for obvious reasons – returns on capital, and for the purposes of tax evasion.
It is this capital that must be unlocked and channelled into industry. The only way to do it, is for the government to invest annually in building low-cost homes for tenant purchase ownership – like 500,000 units yearly costing from Sh500,000 to Sh1.5 million.
But is that all? No. The government would have to build industrial parks next to the housing colonies and link the parks to Lapsset and SGR. So we would have towns away from Nairobi.
Further, the government would still have to create a Sh60 billion sovereign fund and deposit the money at the National Bank of Kenya for onward lending at single digit interest rates to those importing machinery and plants for production at the industrial parks.
The compound effect of this will be phenomenal – a game-changer. Bank rates would be forced to adjust to logical levels. Landlords would find it easy to diversify into industries pouring trillions of shillings into production, and thus making Uwezo and other funds look like loose change!
Kenya would have to arrange an international exhibition for machinery, production floor robotics, power-saving gadgets, Kaizen production – to guide banks and local investors.
LOW-COST ENERGY
When international industrialists see this happening, they will beat a path to Kenya in no time.
President Kenyatta must keep his eyes on the ball. He must whip his Cabinet Secretaries into line. For example, after getting KPCU out of receivership, a certain commissioner of cooperatives has given orders for board elections whose effect will be to kick out the current board whose term has not expired.
It is these dirty proxy wars by civil servants that mess up the economy in the long run. Those that want KPCU dead and buried are many, especially those that owe the farmers’ body money.
One of them owed more than Sh1 billion 10 years ago, and this before interest.
The good news is that the Kibaki regime left a clear roadmap for low-cost energy in Kenya starting from next year. The sky is the limit.
Mr Muiri is a Nairobi businessman ([email protected])
