No serious plans in party manifestos to fix economy

I must say that I find the manifestos being put out by the major political parties a bit boring.

I have read through the documents by the two big parties to see a serious plan to kick-start the economy.

My conclusion is that they fall way short in terms of both meeting the people’s desire for something radically different and for real change.

The citizens of this country want drastic change but the political elite is still wedded to the status quo.

RADICALLY DIFFERENT

Actually, much of what you find in the manifestos is not radically different from what you see in the existing policy documents, especially Vision 2030.

The contents sound more or less like a recap of what is in existing government programmes.

It’s all about tax and spend. Indeed, manifestos in this country are more of profligate spending programmes stitched together arbitrarily without an indication as to whether these long lists of projects will be funded from tax collections or paid for by contracting more debt.

SERIOUS THOUGHT

Neither do you get the feeling that serious thought has been given to the likely implications of the big spending programmes the politicians are promising on the burgeoning public debt or on macroeconomic stability, in general.

I wanted them to promise that all the additional spending will have to be funded from additional revenues and to spell out the new taxation measures they plan to introduce to raise the money from.

Isn’t it the case that the Kenya Revenue Authority has in recent years been having problems meeting its revenue targets?

There is intellectual dishonesty when you base your manifesto on the make-believe narrative that Kenya’s economy is performing very well.

A serious plan to give the economy a new kick ought to start with an honest admission that the conditions in the real economy are less than satisfactory.

LEADING COMPANIES

If things were rosy, as the elites assume, how would you explain the fact that the profitability of most of our leading companies remains depressed?

How do you explain the preponderance of the companies issuing profit warnings and the fact of the widespread and crippling distress in half of our commercial banks?

Indeed, most of what we have are zombie banks living out regulatory forbearance by the Central Bank of Kenya. 

If the Central Bank were to insist today that all the banks must abide by the guidelines on liquidity and asset quality, the living-dead ones would immediately disappear.

WEAK ECONOMY

Yet another indicator of an underlying weak economy is a decline in investment by businesses.

Does it surprise that we no longer hear stories about profitable businesses coming out every now and then to announce major expansion projects?

How is it that we no longer hear about frequent corporate debt issues by thriving companies reaching out to our capital markets to raise long-term money to fund new investment and expansion?

The fact of the matter is that there are far too many proxies for growth showing that the economy is not performing that well.

ANAEMIC GROWTH

When you look at the trends in agriculture and manufacturing, all you see is anaemic growth.

The Jubilee administration has been touting an exponential growth in the number of new electricity connections.

But the statistics on the performance of the monopoly electricity off-taker Kenya Power, do not show a rosy picture.

Despite the growth in new electricity connections, the statistics from Kenya Power’s audited accounts show a major slump in electricity demand by large and industrial consumers.

ELECTRICITY CONSUMERS

When you see the numbers for demand on industrial electricity consumers going down, it is a sign that growth is stagnating.

Until we start seeing a vigorous rise in agricultural output, substantial investment in new plant and machinery, a new explosion in corporate profitability, and a major spike in credit to households and businesses, durable growth and decent jobs will not happen.

We need plans teeming with ambition to turbocharge the economy and snap it out of stagnation.

PROFITABLE BUSINESS

One of the biggest problems we face today is the lack of new opportunities for starting profitable business.

And, you have the paradox of rapid growth and innovation happening in companies such as Safaricom co-existing with stagnant productivity and growth in the wider corporate sector.

Ask any small business person you meet — a taxi driver, a newspaper vendor, a second hand clothes dealer, a second hand car importer about how business is doing and the standard refrain will be: Hakuna biashara siku hizi (there is no business these days).

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