Reduce public wage bill to make Uhuru’s four-point plan a reality

The four-point plan by the Jubilee administration will run into headwinds unless President Uhuru Kenyatta does a few things as soon as possible.

First, he must name a very competent Cabinet, one that is capable of implementing his agenda on time.

The new ministers must come up with concrete plans to save public funds through staff rationalisation and other areas in their respective portfolios.

With Kenya’s public wage bill being very high, such a move would save the country a lot of money.

That cash would then be used to implement the four-point plan.

TAXES
Most of the money for development is borrowed, which pushes the country’s debt to undesirable levels.

There is also a need to reform the operations of the Kenya Revenue Authority so that the agency can collect taxes daily from the informal sector, as is the case in Turkey.

This will greatly improve the country’s cash flow and make debt uptake by the government almost unnecessary, allowing banks to inject money in the private sector in general.

The other thing is to provide public land for real estate development so that home ownership through a tenant purchase plan would become viable.

JOBS

This kind of policy shift would create two outcomes.

The first is that Kenyans would own good quality assets through savings because the rent paid would be converted into mortgage.

Secondly, and more importantly, landlords would find it more lucrative to buy machinery and start engaging in the manufacturing business because the number of tenants would have dropped. This would create more jobs.

We might, therefore, start seeing the rejuvenation of the Kenya Industrial Estates, the Industrial and Commercial Development Corporation, as well as the Industrial Development Bank, among other long-forgotten government agencies that were started to help Kenya to industrialise.

In addition, Kenya must start setting up special economic zones, as is the case with Ethiopia.

The President’s intention is to leave a good legacy where unemployment would be reduced from a high of 65 per cent to a single digit.

KARIUKI MUIRI, Nyeri.

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There are indications that the government may soon review the law capping interest rates as it has failed to achieve the anticipated results.

The objective was to enable small businesses to access affordable loans.

Unfortunately, banks have once again conspired and hoarded cash.

They are making unsubstantiated claims that the small and medium-sized enterprises are too risky to give loans.

These claims have been rubbished by some critics, including their regulator — the Central Bank of Kenya (CBK) — which believe that most loan defaulters are actually the big corporations.

DEFAULTERS
However, the CBK and the government remain too lenient on the banks.

Instead of repealing the interest cap law, the government should enact two more laws.

The first will be to protect banks from wonted defaulters by making it criminal for a business to fail to pay back its loans.

The second will be aimed at protecting genuine small businesses that seek to take loans.

EDWIN MUSONYE, Kakamega.