Weak spending by Kenyans a nightmare to policy makers.

Growth in consumption taxes lagged behind overall government revenue collection in the first three months of the financial year, indicating the economic recovery is yet to translate into increased personal incomes that can boost spending. In results released this month, the Kenya Revenue Authority (KRA) reported an overall 13.2 per cent increase in revenue collection between comparative months of July and September 2010, but Value Added Tax- which is used as a proxy for measuring consumption patterns in the economy- grew at a slower pace of 2.5 per cent.KRA said in a statement that the Sh16.4 billion overall growth in revenues to Sh140.4 billion in the first quarter of the year was powered by improved performance in agriculture, construction, manufacturing and financial sectors of the economy.
As an Economic expert, the subdued growth in VAT collection, which increased by a paltry Sh500 million to Sh20.9 billion, means that current GDP growth is mainly being driven by government expenditure, and is yet to translate into increased household incomes, in other words the slow growth of one could only mean that it is compensated by the other. “It could be an indication that growth is not trickling down, or that VATs are not being paid,”
The KRA revenue collection report did not indicate if the tax man is on course to meeting this year’s total annual collection target of Sh610 billion.
While the first quarter results point to the target being missed by 8.3 per cent, this straight line deduction has pitfalls in that some quarters are more significant than others depending on the business cycle of tax payers. Heavy government spending in infrastructure and construction projects across the country are so far providing the single biggest boost to overall economic growth. The weather has also been conducive and agriculture is recovering, pointing to the heavy weighting of the sector, which accounts for a fifth of Kenya’s total GDP.
Improved weather conditions significantly changed the fortunes of the key agricultural sector that employs more than 60 per cent of Kenya’s workforce and lowered the cost of food, estimated to take up 60 per cent of poor household incomes.
Latest economic growth figures by the bureau of statistics put construction as the fastest growing sector of the economy, having expanded by 18 per cent between April and June.
The sector has recorded a huge jump in uptake of loans, where the CBK says net lending grew from Sh43.3 billion to Sh81.7 billion in the year to June, faster than household lending that rose from Sh84.3 billion to Sh118 billion.
Financial intermediation was the second fastest growth sector, enlarging by 16 per cent while the electricity and water sector grew by 14.4 per cent.
Tax collection on petroleum dropped by 5.5 per cent compared to the three months between July and September last year, in a possible indication of reduced consumption of oil for power generation relative to last year.Trade taxes, which mainly comprise of collections from business licenses, recorded the biggest growth of 25.5 per cent indicating that Kenyans could be opening up new businesses hoping to profit from the ongoing economic recovery.
International trade indicators showed marked improvement in the first half of 2010, with volume of merchandise trade increasing by 16.8 per cent as per the bureau of statistics figures.Direct domestic taxes and revenues from fees and licenses increased by 16.3 per cent and nine per cent respectively.
Kenya’s economy grew at the rate of 5.4 per cent in the second quarter of the year, in what the bureau of statistics attributed to a recovery from internal and external shocks that have pulled back growth since 2008.The second quarter growth was realized in an environment of relatively low interest rates, lower inflation and increased production of cheaper hydro-electricity that kept the cost of borrowing in check and eased the pressure on household budgets.

Why It’s Foolish to Weaken shilling to Create Flower Jobs

I keep hearing that the only way we’re going to create jobs in Kenya
agricultural sector is to keep our Shilling weak.

Here’s the theory. As shilling falls relative to foreign currencies
like sterling pound, Euro, everything we export becomes less expensive
to foreign consumers.
So they buy more of our stuff, creating more jobs in Kenya-agricultural sector
. At the same time, everything they make costs us more. So we buy less
from them and more from each other. Again, more jobs here at home.
-That is why imported cars are more expensive than our tea

But using a weak shilling to create Kenyan jobs is foolish, for two reasons.
First, no other country wants to lose jobs because its currency
becomes too high relative to the Ksh.
So a weak shilling policy invites poverty period.
 Everyone loses.
Here’s the other problem. Even if we succeed, a weak shilling makes us
poorer. If we keep imports at around 46 percent of our economy, so a
dropping Shilling is exactly like an extra tax on 46 percent of what
we buy.

It’s no big accomplishment to create jobs by getting poorer.
You want to know how to cut unemployment by half tomorrow?
Get rid of the minimum wage , and make everyone who needs a job work
for a negotiated wages.
And my friend Mr Atwoli  Cotu secretary need to know this that a
two-tier wage contracts are newest lady gaga in labor relations.
Older workers stay at their previous wage; new hires get lower wages
and smaller benefits.
Even a wage freeze becomes a lower wage over time, as inflation eats into it.
Get it? The goal isn’t just more jobs. Answer-It’s more jobs that pay
enough to improve our living standards.
Using a weakening shilling to create more jobs doesn’t get us where we
want to be.

Young Vs Old

The debate has been here with us for as long as I can remember, and it is not about to stop any time soon.
These are matters to do with LEADERSHIP and who should be at the very top, especially when it comes to matters politics and Kenya in particular.
What I have always failed to understand is the belief that young people can make any good leaders than the old guards. This is because some of the old chaps
got their positions while still young and have never being of any importance to the society.

Friends, I beg not to be misunderstood but all am asking for is for people to be realistic in their arguments which in my opinion should be articulate and precise,
and should not be driven by prejudice, hatred, jealousy and tribal inclination for that matter. I am so passionate about this matter because at no time have I ever imagined throwing out my old mzee(Old man), just because he is old. He is such an integral part of my well being, reason being that I have always run to him for advice on weighty matters that
I would otherwise not be able to handle.

As a young person, I am by no means against the young, but am always left baffled, especially when young professionals, advance their arguments on why
the old guards should be shoved aside.
From my personal experience, and I believe most of you will agree with me, most young people are driven by prejudice, pride, arrogance, just to mention but a few sticky issues.
This forms the basis of my argument that as much as the youth must be given room in matters leadership, some wazee(Old men) must also be there to give guidance to these
vulnerable group.

As young people, we must stand up and prove our worth and mettle. This is because most of the young people in positions of leadership, political leadership for that matter,
have for some reasons proven that they are just a bunch of good for nothing leaders. All they do is run around making lots of noise while doing nothing for their subjects,
to whom they are never answerable to. I am a disappointed young professional because I expected an alternative leadership from my peers who were voted in office but have so far
been a cropper. If we fail even to lead a small group of people (constituency), how then can we be entrusted with the National Leadership????

Just as my old mzee is still and will remain a part of my being, so are the old wazes(men) we are trying to shove aside saying that they are too old to lead.
Since when did your dad become too old to be the man of his boma(Home state)???

In matters Mike Sonko and Makadara, just to illustrate my point, the guy gets elected and even before he gets to parliament, he harasses a fellow young man and warns him to "Chunga maisha unaweza kufa hii Nairobi"(Take good care of your life, you can die in this Nairobi). I have nothing against Sonko but if this is how the young pros. are going to change Kenya, then I'd rather stick with my Old mzee, at least he won,t threaten my life.

If we are serious we want to rise to positions of leadership, let us first of all stop being egocentric towards our peers, rise to the occasion and prove that
we can be entrusted with the delicate responsibility of running this country, and any other positions of leadership for that matter. Other wise we might just have to stick with Wazee(The old) so as to be peaceful and for the continuity of our Nation.

Building an agro-commodity exchange in Kenya

The government should seriously rethink its strategies for revitalizing agriculture. It is saddening that despite Kenya having an agro-based economy, has citizens who continue to experience food supply shortages.The problem has led to high incidence of hunger, malnutrition and, in some extremes, starvation. While the efforts that have produced the Agricultural Sector Development Strategy are commendable, a lot needs to be done to revamp agricultural production and development.
As part of the efforts to revitalize agriculture, Kenya urgently needs to set up a formal Commodity Exchange.This shall significantly help in the trade and marketing of agricultural products.
What therefore is a Commodity Exchange? It is a market organized to allow for the selling and buying of commodities.
These may be traded in three types of markets: cash, futures and options. Maize, Cocoa, crude oil, and gold are some of the commodities traded across the world. Anybody may trade through member firms. The organisation itself regulates the trading practices of its members while prices are determined by supply and demand.
The organisation provides the rules, procedures and infrastructure for commodity trading, oversees trading practices while gathering and disseminating marketplace information.
Transactions take place on the floor — the pit — and must be effected within certain time limits.
Floor traders, floor brokers and futures commissions merchants working on the floor must be registered by a regulator.
The goal of the exchange would be to promote efficient markets and boost price discovery while enhancing risk management hence protecting players like farmers.
In the Kenyan context, agricultural products to be traded include items like maize, wheat, beans, barley, sugar, cotton and fertilizers.
Contracts based on the same products may also be sold at the exchange.
The concept is not a novelty in Kenya. The Nairobi Coffee Exchange has a long history dating back to the 1940s while the Mombasa Tea Auction which serves East Africa and parts of Southern Africa has gained prominence as a major tea auctioneer and is currently the second largest in the world after Colombo in Sri Lanka.
These two commodity exchanges have not only provided a centralized and organized export platform for the two cash crops but also ensured effective competition among buyers and sellers.
The Kenya Agricultural Commodity Exchange Limited which was established in 1997, is the first major attempt to establish a commodity exchange for agricultural products other than Coffee and Tea in Kenya and in the East African Community (EAC) region.
SAFEX of South Africa is one of the most active commodity exchanges in Africa that deals in grains among other products.
The Chicago Board of Trade in the USA, with its origins in 1848, is perhaps one of the oldest commodity exchanges in the world.
However, for a Commodity Exchange to grow and flourish and serve its purpose effectively, it requires a legal and regulatory framework.
With the implementation of the Vision 2030 under way, the establishment of an effective Commodity Exchange for agricultural products should be made a priority for Kenya and the wider EAC region.
A successful commodity exchange is dependent on the availability of tradable volumes of commodities, a big market, sound infrastructure and an effective telecommunication network.
Financial services
It also relies on sound financial services, the existence of strong players, a network of secure and reliable warehouses and the existence of a sound legal and regulatory framework for a commodity exchange and for warehouses. Most of these building blocks are already in place.
The National Cereals and Produce Board alone has 110 depots and silos with a combined storage capacity of 1,890,000 metric tonnes.
Other institutions including the Private Sector have warehouses mainly located in major urban centres.
A Commodity Exchange will create a market for tradable documents generated by this huge Warehousing Network and their respective derivatives.
It will also attract participants from the region.
The ongoing effort by the Eastern Africa Grain Council (EAGC) for the promotion of structured grain trading in the EAC Region have already initiated the establishment of a Warehouse Receipt System recognized by the stakeholders in the grains industry.
Due to the improved co-operative movement, many Kenyan Farmers, Millers, Traders and other stakeholders have formed associations that advance their business interests.
These structured groups will use the exchange and the Warehouse Receipt System as the best instruments for consolidating their products into marketable volumes and marketing them efficiently and profitably.
Both local and international financial institutions have introduced products that recognize the use of warehouse/warrants as collateral for accessing credit and are ready to support structured trade through regulated exchanges.
There is the presence of internationally recognized and experienced collateral management companies interested in the professional management of warehouses for the Warehouse Receipt System.
The East African Community provides a large population and hence a market of nearly 130 million people.
The grain market in East Africa is ready to support initiatives that would market grain quantities surpassing 10,000,000 metric tonnes, which represents a minimum total production of maize, beans and rice annually.
These commodities are traded at various open markets and across borders within the EAC Region.
The Strategic Grain Reserve function of the Kenyan Government can be well served and managed, for instance by the Government purchasing commodities and holding warehouse receipts while releasing them through the Exchange at an appropriate time.
This gives the Government the instrument and power to effectively intervene during times of shortages and surpluses, thus providing stability
Also, an Exchange provides vital information that assists stakeholders to keep in constant touch with market trends especially in commodity prices through regular publications and dissemination of the information.
Lastly, it regulates trading activities by monitoring performance of authorized players.
Kenya currently needs a vibrant all inclusive Commodity Exchange to improve and promote agricultural trade in domestic, regional and international markets for her commodities.
This will improve agricultural growth and food security, enabling the agricultural sector to contribute more effectively to the success of Vision 2030 for the country.
While stakeholders in the agricultural sector are actively addressing the critical issues that need to be addressed for this noble idea is to be realized, the Government should put in place sound legal and regulatory frameworks in terms of a Commodities Exchange Act to support the initiatives.

In Kenya And Africa At Large Poverty Rules

A kenyan mother

 “I know poverty because poverty was there before I was born and it has become part of life like the blood through my veins. Poverty is not going empty for a single day and getting something to eat the next day. Poverty is going empty with no hope for the future. Poverty is getting nobody to feel your pain and poverty is when your dreams go in vain because nobody is there to help you. Poverty is watching your mothers, fathers, brothers and sisters die in pain and in sorrow just because they couldn't get something to eat. Poverty is hearing your grandmothers and grandfathers cry out to death to come take them because they are tired of this world. Poverty is watching your own children and grandchildren die in your arms but there is nothing you can do. Poverty is watching your children and grandchildren shade  tears in their deepest sleep. Poverty is suffering from HIV/AIDS and dying a shameful death but nobody seems to care".  " Poverty is when you hide your face and wish nobody could see you just because you feel less than a human being. Poverty is when you dream of bread and fish you never see in the day light. Poverty is when people accuse you and prosecute you for no fault of yours but who is there to say something  for you? Poverty is when the hopes of your fathers and grandfathers just vanish within a blink of an eye.  I know poverty and I know poverty just like I know my father's name. Poverty never sleeps. Poverty works all day and night. Poverty never takes a holiday"            (One Poor Kenyan)

Brew-'Natural Family planner Among the Poor In Kenya'

It is indeed ironic that in a country where the population has almost doubled after a decade, there exists a place in central Kenya (Mukurwe-ini) where women are given monetary incentives to give birth; a place where the sound of children playing and laughing is as rare as rain in the Sahara, big padlocks greet one at the gates of primary schools which have been closed down because there are no little ones to teach.

Roles in the families have reversed as women take on responsibilities as bread winners and residents stare blankly into the future, wondering whether there is a future for them as both the young and the old men channel their energy to their now worst enemy, the beer bottle.
While this frothy stuff has always been part of the social life in our country, the renewed enthusiasm with which it is consumed, especially among the youth in Kenya would cause our forefathers to turn in their graves. Sadly, this has brought about scenarios like the one above and much worse. Regardless of its alias - relieving stress, drowning sorrows, passing time and bonding with age mates… the drinking culture in Kenya cannot be ignored or wished away.
The effects of alcohol consumption on the society are far reaching - affecting families’ older and current generations, destroying individuals and draining resources. Just where are we headed if this boozing trend continues? Is there a threat to the future proper functioning and operations of our society as we know it?
“People often deceive themselves that they will walk out of the trap at will. It’s like a self imposed jail sentence,”. “What starts harmlessly as ‘social drinking’ soon turns into an addictive habit that spirals out of control,”, This trend can be attributed to factors such as the level of poverty, high stress levels occasioned by the performance culture at work, peer pressure among the youth and a feeling of hopelessness among both the young and old.
The current generation of young people is cynical, and thus are not keen on saving for the future. Their disposable income is therefore likely to be spent on feeding their drinking habits. “Their interpretation of their surrounding – political, social or economic- seems to tell them that nothing is going to change for the better anytime soon. They thus have a ‘live it best now mentality,”

This addiction to alcohol paves way for other ills such as drug abuse and sexual immorality. “In order to sustain the high that results from alcohol, some will opt for illegal drugs such as cocaine. When under the influence of alcohol or drugs, it is easier for an individual to engage in casual sex, thus risking sexually transmitted diseases such as HIV,”.

One significant result of this drinking culture is the change in society’s dynamics. In areas where the problem of alcoholism has affected many men, women are forced to become breadwinners, and take over the role of men. “Some men abdicate their roles and even fail to fulfil their conjugal responsibilities in favour of the bottle. The continuity of society is thus at risk. The women are not spared nowadays, and the number of women drinkers is steadily rising as they also turn to the bottle to deal with stress,”
The children suffer silently from trauma as they witness the abusive habits that result from alcohol. Children from such family settings are more likely than not to be alcohol abusers later in their lives, in addition to having an aggressive and violent predisposition. The cycle of alcoholism will more likely continue through generations.

So where are we headed as a society if this trend continues?

“Drinking culture is destroying the great minds of this generation who are looked at as the future of the country. Some eventually become a burden to their families and prolong the cycle of dependency. This eventually has an impact on the economic and social development of the country,”,destinies are cut short, individuals live in selfish pursuits of pleasing themselves and suffer from depression when they realize that the problems and pressures they were escaping still exist after their high is over. They then drink again to escape reality and the cycle continues.


“At this rate, I fear that the end result will be an Economic crisis due to  breakdown of families and society’s values if this trend is not checked,”.

WHY IS KENYA STILL POOR?

 ‘Kenya  is not  poor because its poor’, Kenya is poor and  will continue to be poor if we  Kenyans are not ready to change and make her rich.

There is poverty  and there is hunger everywhere. HIV/AIDs continues to kill Kenyans in record numbers. The question is not why Kenya is poor but may be how we can make Kenya rich. What  can we do as individuals or groups to help change Kenya?.

There is abject  poverty in Kenya but it’s a country that  has almost all it takes to be the richest country in Africa, from its natural resources to  human resource . The major problem facing Kenya today is corruption and poor leadership.  There are greedy people in Kenya including our leaders who don't care about their poor mothers, fathers, brothers and sisters.

Some people are too greedy and that is why Kenya remains poor. People are killing their own brothers, sisters, mothers and fathers just to make money. People didn't care about yesterday and people don't even care about tomorrow. All they care about is money and money and that is why Kenya remains poor.

All Kenyan leaders I know are corrupt in one way or the other. They come as saints and leave as devils.. A Kenyan president is a president for a few selected people. A Kenyan president is a president for only the educated and a president for only those in the higher class from His community. A Kenyan president sees no poverty. A Kenyan president sees no hunger. A Kenyan president sees no HIV. A  Kenyan president knows no orphan.

 A Kenyan president shows no mercy. An Kenyan presidents sees only money and money and nothing but money.. Not just the Kenyan president but also the  Kenyan prime minister, the Kenyan Member of parliament , the Kenyan Doctor,  the Kenyan Judge, the Kenyan lawyer, the Kenyan PC,DC’s,DOs, and even the Kenyan Pastor. And that is why Kenya is still poor and continues to wallow in abject  poverty."