Whats wrong with my motherland, Kenya?

These days, when there is plenty in one part of the world, there is scarcity in the other part.Eathquakes,tramours and volcanic eruptions, calmness in the other part, war in the Arab world, peace in the non-Arabic nations and many more.

Here in Kenya, it’s not any different thanks to global warming, the onset of ‘long’ rains last week came as a great relief to many. It was not long however before there was wailing and teeth gnashing in many parts f the country because powerful downpours were causing flooding and extensive damage. The result of this is that the rains are going to finish off what the preceding drought had started, not unlike what happened in northern Kenya when sudden downpour killed off livestock that had been weakened by lack of water and pasture. What is wrong with this country?

Baringo County Thug Of War Uneconomical

After past weeks’ wrangles over the head quarters of this county, sought the in-depth meaning of the name Baringo, the answer I got was a shocker, in the local language; Bar (Kill) and Ingo (a brother), in short the name Baringo means kill a brother. The wrangles which nearly got physical at some point between to Mps, Hon. Cheptumo and Hon. Sambili reflects how volatile the ground rily is, cattle rustling and killings at its best.

Baringo county is located at the heart of the rift valley, it has a rich history and holds a special place in the annals of not only Kenyan politics but also economy. From the political angle parse, it produced a record serving president who ruled Kenya from 1978-2002 (24 years), while in the economic arena, its terrain and amazing scenery contributes billions to the exchequer each financial year through tourism. However despite this massive contribution to the national coffers, it’s ranked among the poorest region with hunger killing hundreds each year, cattle rustling also adds to this death toll.

The motherland of honey, aloe vera,sisal and diverse culture is at the cross roads in finding a suitable administrative centre to the newly established county which covers 5 constituencies(Baringo central,Baringo east,Eldama ravine,Baringo East and Mogotio) .It’s heartbreaking that politics is taking a centre stage in the issue instead of a feasibility study to ascertain a ‘prime’ location and one is left with more questions than answers in the ‘contentious’ issue, Why do we have evaluation officers?, why do the county leadership fear a county mass survey? And is political muscle the first and last option?.Kabarnet or marigat?, the voting might skew to the later but is this feasible?.From my point of view, marigat is a food basket and a tourist attraction region with the location of 2 lakes; Lake Baringo and Bogoria (with glaciers).

Environmental economists will concur with me that its infeasible to construct an industrial town near a lake without environmental impact assessment and cost benefit analysis, due to pollution and relatively poisoning of aquatic.Tourism ought not be used as a reason to crowd marigat because these persons need some privacy and therefore need a vicinity outside a commercial centre. In short commercial(industrial center) and tourism are two sides of the same coin, they add value to the coffers of the county,yes,but you have to differentiate them if maximum revenue is to be derived.Marigat therefore needs road expansion, tourist amenities and conservation if the county is to flourish.Kabarnet which is relatively established, with an estimated infrastructural value of 20 billion should be kept for administrative purposes and resources from the central government channeled to revenue generating activities but not mere administrative infrastructure.

Is The Central bank of Kenya to blame?

I must admit it ain’t easy at any time to be a policy maker, an individual or corporate decision affects millions of people whether positively or otherwise. Political instability, oil crisis and weak government policies are to blame for the current economic phenomena. It’s therefore apparent that several factors are to blame for the weakening of the shilling and the runaway inflation. In my today writing allow me to single out government policies (both Fiscal and Monetary) which have brought us to this ugly state.

I woke up to peruse the business news as usual and was disappointed to see inflation has it a rapid high of 6.54 %.It’s disturbing to see the local investor unable to thrive in forex due to the daily souring of the shilling. An importer in Kenya today equals a speculator, with the fluctuation of the local currency. Many economists will argue that inflation is good for economic growth but what about a runaway one? .In the short run inflation might increase the GDP but that also affects the welfare of the general population negatively in accordance with the domestic consumption. Families moreover will channel more of their resources in purchase of basic consumption good and missing out on investment because of the savings dent.

When the regulator (CBK) reduced bank rate to 6.5% it was apparent that the economy would flood with liquid money. To highlight how this comes about let me illustrate it with the mushrooming infrastructure and growth of commercial banks portfolio. The additional currency in circulation is due to the rapid developments engineered by government (Fiscal policies),i.e. the channelling of resources to improve the road and housing network throughout the country, the profits released recently by commercial banks doesn’t amuse me either, when I see a commercial bank add a shilling from her final output,i see an extra shilling in circulation which demand an extra quick policy. With the public having a lot of liquid money (due to fiscal and monetary policies) in their coffers, demand for ‘needs’ highten, affecting the supply (due artificial shortage of goods). This therefore in line with the principle of demand and supply subsequently increases prices.

The Kenyan shilling hitting a high of 86 per dollar is a plus to the external economies, who are now able to import our good and services cheaply while it gags our forex players. The central bank of Kenya bonds with a coupon rate of 12% are indeed okay in mobbing some of the excess money in circulation but why drain a dam when it still has other tributaries to feed it?, With this reality hitting the public, its time policy makers rush to save the hoi polloi and investors from this crisis through rapid but feasible policies.

Information Technology must embrace ‘informal’ trade to make an impact

Science and technology has promised to bring prosperity for more than a decade now,but little progress has been made.Ecoke has largely established that Kenya and African way of making and trading is largely informal.
The word “informal” may conjure images of black market activity or harmful economic practice —the darker, rarer side of informality.But the informal economy which are legal businesses that are largely unregistered and unprotected always known as ‘Jua kali’ in Kenya— comprises a much broader spectrum of activity, from piecing together scrap materials in makeshift workshops to extending credit to loyal customers. Most products are simple goods like furniture and kitchenware but a select group of advanced craftsmen has developed complex agricultural and tooling machines.
In Kenya, the latest survey of microenterprises, published by the National Bureau of Statistics in 1999, suggests that over three-quarters of non-agricultural employment occur in the informal economy.If technological interventions are to have impact, they must adapt to this informal mode of making and trading.The informal spirit, known in Kenya as jua kali, has produced clusters of economic activity throughout Africa’s cities and rural market centres.
Producers and traders set up shop in close proximity, attracting competitors, labour, customers and support services such as credit providers.This positive feedback loop has bred some of the largest manufacturing clusters in the world — Gikomba in Nairobi, Kenya, for example.These flourish due to three elements: the resourcefulness, relationships and reason (or knowledge) of the entrepreneurs.
Resourceful engineers make treasure out of trash — from oil lamps made of soup cans to grass cutting machines made of scrap sheet metal — and at the end of their useful life, these items are fed back into the web of production by scrap pickers.An understanding of the local context is deeply embedded in informal business.Engineers continuously adapt production methods to available materials and product quality to customers’ wallets — precisely the flexibility needed to thrive in that context, however frowned upon by regulators.
Despite the promise of informal clusters, little innovation has emerged in terms of new products that meet local demand — tools that boost agricultural production, for example.
What happens, for example, when governments or multilateral institutions introduce factories and corporate parks?.Not much. A factory might employ a dozen skilled workers, but the investment rarely trickles down to the “indigenous” economy.And enterprises may only import raw materials and export the resulting goods, creating a closed loop with no links to domestic industry.
The main barrier to innovation and growth for entrepreneurs is risk. We can reduce this risk by improving access to resources like credit, tools and skills.And we can increase the willingness to take risks by promoting a culture of innovation by using market intelligence, working with customers to co-create products and improving the design process.
But simply reducing risk is not enough: in Kenya, a UN Industrial Development Organisation (Unido) project provided power and equipment to rural jua kali business owners only to find that they used the new tools to make the same products at the same quantities.Maker Faire Africa, a festival for craftsmen, has sparked a social movement around informal innovation by rewarding those who demonstrate inventiveness and risk-taking.
This movement has incubated new technologies for local consumption, such as a machine for making rope and a tea maker activated remotely by SMS messages.Though resourceful on its own, the informal economy is inextricably linked with the formal economy.For example, factory waste provides materials, and the most reliable commissions are subcontracted from formal enterprises.And formal systems can have a broader impact.
The explosion of access to mobile devices and cloud computing is making a difference in Kenya — allowing small businesses to make payments more easily and securely using Safaricom’s M-pesa, for example.
Though the informal economy on its own may not yield prosperity for Africa, technological and scientific interventions that leverage informality will be more likely to succeed.

The financial crisis was a ‘stock market’ failure

The new year 2011 is here with us and with the number of financial resolutions Ecoke deemed fit to vividly look into the past year crisis which brought many economies to their knees, ‘The financial crunch’.Ecoke believes that the crisis was manmade and would have been avoided if all the stakeholders were involved. You are asking why?, Ever asked why these top firms were never affected by the global crisis?;
1. Primark
2. Pawnbrokers
3. BBC
4. McDonald’s
5. Ryanair
6. William Hill
7. Google
8. Wal-Mart
9. Exxom Mobil
10. Potential Entrepreneurs
At that moment, one could spot a common problem with Investment banks’ balance sheets, where you observed that on the left side nothing was right while on the right side nothing was left. The primary victims of the crisis were; the housing market which reported dramatic falls in activity as housing construction and buying collapsed in major economies, Secondly, the Bank and financial services which as the scale of ‘toxic debt’ and mortgage default unravelled, reported inevitable record losses and finally the Discretionary retail spending in particular the car industry, hotels, airlines and international travel sector in general. The US was at the receiving end, with many accusing it of making a new weapon that destroyed people ,but kept the building intact(The stock market).Its times like these when tremendous competitive success were achieved, Companies shifted positions in the market place, market leaders become followers and followers become leaders, because it was a period where everything was opening and unfreezing. Financial insecurity was real, a bank client in an interview once said... ‘What worries me most about the credit crunch is that if one of my cheques is returned stamped ‘Insufficient Funds’, I won’t know whether that refers to mine or the banks’. Do we have sound financial policies for this year and posterity?