Only innovation makes the leap from poverty to prosperity

A fascinating post on The Curious Capitalist blog, titled “Escaping the middle-income trap” offers valuable advice to government policy makers when planning for economic development. Kenya’s Vision 2030 proposes to make the economy a middle income country; but what happens when that is attained and the time comes to make the leap to a truly world class high-income economy?

Taking the example of Malaysia and comparing it with South Korea, the writer posits that only innovation will enable a country to break out of the trap and make the big leap to high per capita economy. In fact the writer goes so far as to say that it is easier for a country to make it to the middle income level than it is to transition into the big high income league:

"The concept behind the “middle-income trap” is quite simple: It's easier to rise from a low-income to a middle-income economy than it is to jump from a middle-income to a high-income economy. That's because when you're really poor, you can use your poverty to your advantage. Cheap wages makes a low-income economy competitive in labor-intensive manufacturing (apparel, shoes and toys, for example). Factories sprout up, creating jobs and increasing income ..."

However akin to an engine running on its own momentum, this model of high growth starts to plateau with competitiveness rising as well as labour costs of the highly educated and skilled workforce. Thus the “trap.”

And apart from lowering the entry barriers into business, it is more vital that economies begin to innovate. So not only should technocrats focus on consolidating business licences, reducing taxes and other barriers to enterprise; innovation should be actively promoted. At YIPE we call this the W.A.R factor:

• Promoting Willingness: a scenario where financial institutions recognise the value of new technologies and entrepreneurs are willing to take risks in order to innovate;
• Promoting the entrepreneur’s Ability: by providing a platform where entrepreneurs can grow their social capital by networking amongst other institutional challenges; and
• Facilitating Resource transfer: by lowering the information asymmetry faced in access to credit and technical knowledge.

Read Escaping the middle-income trap here >>>>

When The Brewing Business Turns Deadly

Last Friday, once again Kenyans were shocked as they watched the death toll rise of consumers of the illicit brew – changaa in Shauri Moyo Estate in Nairobi’s sprawling Eastlands area; which as of today has reached 9 according to the Daily Nation.

Changaa is a local brew that resembles vodka, Tanzania’s Konyagi and Uganda’s Waragi. However unlike it’s East African sisters, changaa has not as yet been legalised.

This is not the first such case in Kenya. In June 2005, 49 people died in Machakos (Eastern Province) after they consumed an illicit drink suspected to have been laced with a poisonous chemical, and it seems that such cases are not going to end easily.

A regular changaa drinker was quoted in the media after learning that five of his friends had succumbed to the Shauri Moyo brew as saying it was "bahati mbaya", bad luck.  However he added: "I will go back to drinking busaa, although it is more expensive, (than chang'aa)".  

Indeed as John Mututho the Member of Parliament behind the recently passed Alcoholic Drinks Control Bill asserts, that the deaths and blindness were caused by extra chemicals added to the brew and “sold to unsuspecting poor Kenyans in the name of chang'aa".

Some commonly used additives include methanol and ethanol. Methanol has a high human toxicity. If ingested, as little as 10 milligrams can cause permanent blindness destroying the optic nerve while 30 ml is potentially fatal. Based on its abilities to change human consciousness, ethanol is considered a psychoactive drug. Death from ethyl alcohol consumption is possible when one’s blood alcohol level reaches 0.4% and a blood level of 0.5% or more is commonly fatal.

If the historic Alcoholic Drinks Control Bill which repeals the Chang’aa Prohibition and Liquor Licensing Acts receives presidential assent, this will mean that brewers of such liquor will have to face stringent quality standards and inspections. However with the current enforcement agencies so far being unable to cope in preventing future loss of life and blindness, it seems that more has to be done to ensure that the vendors adding dangerous substances to these brews are stopped.

Unfortunately the business opportunities in this sector remain attractive for those seeking to make a quick buck. Changaa is popular because it is cheap. A mug costs Sh10 (approximately 20 US cents). It also has the added attraction of being readily available, though not on  supermarket shelves nor established bars.

And it is not just slum dwellers who have taken to changaa. Crippling taxes have forced formal sector brewers to hike their prices and the informal sector brewers have benefited from more customers due to their low priced product. However, unlike Kenya Breweries or Keroche industries who have to go through rigorous quality standardisation and expensive marketing to manufacture their products and attract customers, changaa brewing is a home based cottage industry where not even a hygiene inspection happens. Word of mouth is generally the marketing tool, and if the price remains low – customer loyalty is assured.

For the Bill (if enacted) to make any significant inroads in preventing the deaths that occurred in Shauri Moyo from happening again, emphasis must be placed on ensuring proper regulatory structures are put in place. The National Campaign Against Drug Abuse Authority (NACADA) has so far been instrumental in making the public aware of the hazards of excessive alcohol consumption. However, the main thrust of their campaign has been the “don’t drink and drive” approach. This means nothing to the changaa drinkers whose main mode of transport is their legs.

Though the objectives of the Bill are noble, there has to be a holistic approach that also educates the changaa brewers and consumers on the dangers of additives. However, as these vendors generally tend to operate from their homes, the Bill does not give cognisance to their informal business culture. To say that brewers will have to be licensed will only mean that many will continue to operate illegally. For those that do get the licence from the proposed District Committee’s, the prescribed licence fee will be passed onto the consumers meaning loss of market.

Even the application for licence procedures will be an issue for brewers who will have to provide “a comprehensive proposal on the nature, orientation and other justification for the establishment of the alcoholic plant” amongst other requirements.

It remains to be seen whether the Bill will make a difference in the lives of the  changaa consumers and brewers. Ensuring that the barriers to entry remain attractive but also strictly enforcing quality standards by providing the relevant agencies with appropriate resources will most definitely prevent future loss of life.

Missing files and Tender Entrepreneur Brokers

“The abuse of entrusted power for private gain is always fine for the one person doing it, but it becomes catastrophic if everybody starts doing it.” - David Pitt-Watson

Last night on the news, Kenyans got to witness Dorothy Angote, the Permanent Secretary in the Ministry of Lands leading what was a day-long graft busting raid on junior officials in her Ministry. The Ministry which handles nearly five million title deeds, has been continuously been named as being one of the top most corrupt public institutions in the country. For her efforts, the PS unearthed thousands of files that had been stashed, some of which had been “missing” since the 1990s.

Kenyans have long become used to the phantom menace called “missing” files. The ghost appears out of nowhere just when one needs to undertake a transaction with the government.

Anyway, Dorothy Angote’s impromptu raid at least saved some Kenyans from the cartel of rogue officers at the Lands ministry as well as what we shall politely call brokers, agents or tender entrepreneurs.

However, Ms. Angote’s prescription to the problem falls short of expectation when she announced that there would be a reshuffle and disciplinary actions for the errant officers. If the Lands Ministry was a private business, for sure at least there would have been mass summary dismissals, if not court prosecutions. To send a clear message, the punishment must be clear.

Kenya has not been alone in handling rogue brokers that encourage public sector corruption. South Africa has also been dealing with such brokers who because of their close connections to the political elite, seem to be amassing great wealth to the detriment of hard working entrepreneurs.

Bobby Godsell the chairman of Business Leadership South Africa was recently mentioned in the media calling for South Africans to stand up to tender entrepreneurs who benefited from state contracts.

He likened this business practice to "a form of economic terrorism" that imposes “a cost on state services and conferring no benefit”.

This came in the wake of allegations that the country’s ruling party ANC’s youth leader Julius Malema's who the BBC recently described “28, a little overweight, impeccably dressed, and rather fond of referring to himself with the royal ‘we’” had irregularly personally benefited from lucrative government contracts. However, Mr. Malema has denied accusations of unearned wealth by saying that he is merely the victim of a political conspiracy and a racist plot.

Indeed Malema is just another example of South Africa’s “bling culture” which has for some compromised ethical business behaviour. Entrepreneurs have had to be linked to a politically connected personalities in order to effectively compete on the public sector market.

Closer to home, business cronyism in the tender sector has led to great resistance each time the government tries to institute measures that will even out the information asymmetry when it comes to public procurement. 

As we mentioned almost two years ago, the broker sector in Kenya has also become a culture where:

“You need a middle man to manoeuvre public processes. For instance, if one goes to the companies, lands or court registries, you have to more or less fight your way to the front of the queue. Brokers have taken precedence and because they have managed to become acquainted with the public officers, they tend to get their work done first … “

And it is this lack of transparent systems and promulgation of red-tape that have been a boon for the broker community. The cost imposed on not just entrepreneurs but every taxpayer in muddling through bureaucratic systems is what ensures that brokers shall always be in demand. After all, the opportunity cost of giving a broker a facilitation fee and lunch money to ensure that your application is submitted or your file is found, is much less than the cost of having to leave your business in order to chase up the matter yourself.

Then there is the issue of business competitiveness which has also had an impact on the need to fast-track (at whatever cost) government procedures. Bending the rules and paying the occasional bribe just to get a process fast tracked or even to be awarded a contract are common dilemmas faced by today’s entrepreneur. Moreover if one is doing it, then you can bet that others just to stay ahead of the competition will also do so.

It has now become recognised that an important catalyst to business growth is enabling entrepreneurs to compete on the public procurement market. And it is encouraging that young entrepreneurs are taking on the bottlenecks in the public sector, and developing new applications that equalize information asymmetries and promote transparency whilst combating public sector corruption. One such business is Tenders Unlimited, a new Kenyan business startup that provides databased access to tenders to business people.

Reducing the opportunity costs of red-tape frees up resources for more productive activities as well as spurring wider economic growth. Thus computerization of government documents should be implemented.

And finally to put rogue brokers out of business, procedures that require in-person attendance should be minimised. As seen by the influx of mobile phone money transfer systems onto the market, banks are now joining the fray and offering mobile payment systems that will eliminate the need for people to stand in long queues just to get their bank statements. Without ZAP and MPesa, chances are that the traditional banks would not have brought banking services closer to the people.

Now we are asking the government to bring it’s services closer to us taxpayers too.

 

Entrepreneur Profile: Josphat Karinga

Josphat Karinga is the Technical Director of Ristech Solutions a Kenyan company he founded in 2003. The company provides a wide array of services for individual and business clients, including assisting them to overcome the obstacles of bureaucracy in the application for government documents, courier services and car rentals. 

 

Yipe.org recently got a opportunity to briefly interview him where he also gave some useful tips on maintaining good customer relationships.

Read the interview here

Entrepreneurship - Kenya's Economic Saviour

By Jeconia Omondi Olonde

The current economic condition for Kenya is on a down hill while the population growth rate is quite high. This implies there is an increase in unemployment as the new jobs created cannot match the increase in population. A situation is created where the youth are finishing university, college and secondary school expecting to be employed yet the economy cannot accommodate them. This will in the end bring social instability especially with the high cost of education.

But what can the government and the private sectors do to help alleviate the situation that may bring the country to its knees? An initiative such as the Kazi Kwa Vijana was started by the government and has ended as a failure, taking the country back to the maze. The Kazi Kwa Vijana could not have been sustained as we can say the jobs given to them “do not add value” to the economy and the government is spending a huge amount of money in paying recurrent expenses. Also some of the jobs given may seem demeaning to some of the unemployed graduates. Telling an engineering graduate to clean trenches shows that the government has no plans for its citizens who are meant to be assets.
 

Further, unemployment situations in Kenya have been increased by the high requirements by employers in order to get jobs. Requirement of years of professional experience for jobs in Kenya has made it difficult for the fresh graduates to get jobs and their Kenyan dream of finding that dream job after years of education.
 

For the country to be able to create employment, the government and the private sector should highly consider embracing entrepreneurship as a source of expanding the economy and reducing poverty. With the shift towards technology, the government can use the youth to enhance and come up with new technologies which will help accelerate growth and achieve Vision 2030.
 

Some of the ways in which the government can do to help youth embrace entrepreneurship are:

• Providing financial assistance and guidance. Many youth have good business ideas but translating these to actual jobs is hindered by lack of knowledge of transforming ideas into feasible and tangible work. Also financial guidance on how to spend the initial finance is necessary as the projected financial statements are is not enough, for example, purchasing of essential assets, marketing and branding, establishing of internal business controls, and book keeping.
• Providing mentors to the youth who come up with good business ideas or proposals. The mentors are used to guide the youth especially through the tough times as they have been in the business before and they know what to do best in such situations.
• Introducing entrepreneurship as a subject in schools so that the students are able to know early enough how to start their own businesses and succeed. Mentality of students has to be changed from them expecting employment for them to create employment. This should be done for both students in professional courses and those in vocational training. In the earlier years, it was preached in radio stations and songs that at the end of education one will get a good job and this mentality has stuck in the mind of the population. We should therefore start changing the minds of people with regards to this.
• Providing tax incentives for young entrepreneurs who provide employment to others. There are difficulties involved with business start ups and therefore the government should recognize this effort by giving the youth tax incentives. This has been done to Export Processing Zones (EPZs) to attract foreign direct investments. Local investments should also be considered important as this brings more stimulus to growth as there are no profit flights.
• Patenting of special business ideas created by the young people. This may reduce the chances of the ideas being stolen by other capable individuals or by corporations. Good ideas are known to have been submitted to “wrong” organizations which take advantage of the weak protection laws of ideas. These weak laws demoralize the young people with brilliant ideas who may opt to stay with the ideas for long until they are able to finance themselves. Developed countries are known to have proper laws protecting ideas created by its citizens and developing countries should follow suit.
  

These are only some of the things the government should take into consideration if it has to help the country become entrepreneurial. The effect of citizens creating job opportunities in the economy cannot be over emphasized and the government has to act fast to improve the livelihood of its citizens.

Statement from Professor Wangari Maathai on the Mau Forest Complex in Kenya

Press release, December 2, 2009

Nations of the world are preparing to meet at Copenhagen for the latest round of negotiations to agree on a global treaty to limit greenhouse gas emissions. It is expected that reafforestation, and reduced deforestation and forest degradation, will be key solutions to the climate challenge.

It is extremely important, therefore, for Kenya to be seen to support protection and conservation of forests, including the Mau, which at 400,000 hectares is the largest forest complex in East Africa. Twenty-five percent of the Mau has already been destroyed through human settlements, cultivation of crops and monocultures, and grazing of livestock. Along with the other four water towers, the complex supports the livelihoods of more than 70% of the people who live around them. Some rivers from the Mau complex flow into trans-boundary lakes, including Turkana and Natron, the breeding grounds for flamingoes, and Victoria, the source of the Nile.

The value of the Mau complex is enormous, with respect to the various sectors it supports. It plays a significant role in regulating rainfall patterns and the climate, and in making possible agriculture, power generation and tourism. Experts have already warned that the continued destruction of the Mau forest will cause catastrophic environmental damage, resulting in massive food crises and compromising the livelihoods of millions of Kenyans, and the possible collapse of the tourism industry. 

While the Kenyan government has a responsibility to ensure that all Kenyans are taken care of, it is also true that no settlements should have been allowed in the Mau forest in the first place. While the government was wrong to encourage these settlements, it cannot hold millions of Kenyans hostage in an effort to justify its own mistakes or appease people it misled. Therefore, the Hon. Prime Minister Raila Odinga and the government are right in demanding that all human settlements in the Mau and other forests cease.

While neither the PM nor the government has all the solutions for the Mau complex, and indeed for all the internally displaced people in the country. Therefore, what the government needs is support both from within and without in order to meet the challenge. Politicians are being hypocritical when they pretend that all displaced Kenyans are not equally in need. National leadership should be seen to care about all Kenyans, and not be driven by self-interest. But when it focuses on only certain communities or regions, it ceases to be national leadership and instead becomes tribal leadership. 

With that kind of ethnically-driven leadership, Kenya is doomed. Indeed, it is that kind of leadership that led us to settle people in gazetted forests in the past, allowed leaders to allocate themselves public goods, or incited Kenyans to kill each other after the 2007 election. Kenyans should be commending the Prime Minister for providing the right kind of leadership, and should be encouraging him to move ahead with the ongoing efforts of saving the Mau and all our forests—for the sake of present and future generations.

Kenya’s IDP crisis: Only history can judge our collective inaction

In the aftermath of Kenya's 2007 general election over half a million people were displaced. Fleeing homes, loosing livelihoods and loved ones. To date some of the 2007 internal refugees still remain both in camps and transit sites. Yet the anomaly of internal displacement is not new to Kenya. From pre-independence, many Kenyans have been forcibly removed from their homes, having to settle elsewhere as refugees within their own country.

In contemporary history, the IDP crisis has been closely linked to the country’s electoral process, particularly with the advent of the country’s multi-party era. The crisis became the proverbial elephant in the living room – a topic that was too taboo to mention. For years following the post-election clashes of the 1990s the Moi regime swept the issue under the carpet, maintaining that there were no IDPs. However, with more freedom of expression and opening up of the media airwaves, the plight of IDPs has gained more limelight.

Kenya’s internal conflict has been almost like clockwork set to the political scene during general election years of 1992, 1997, 2002 and 2007 as well as the constitutional referendum of 2005. Every five years people have had to flee their homes and that is why the IDP situation falls into the category of a “complex emergency”.

So why term Kenya’s IDP crisis a complex emergency? For the simple reason that unlike natural catastrophes, people loose all they have in a matter of minutes yet the underlying cause is politically instigated and conflict-generated (Macrae and Zwi, 1994).

The United Nations’ Office for Co-ordination for Humanitarian Affairs (OCHA) (which draws its definition from the UN's Inter-Agency Standing Committee) defines complex emergencies as ‘a humanitarian crisis … where there is total or considerable breakdown of authority resulting from internal or external conflict …. (IASC, 1994). However, this reliance on authority breakdown has been criticized. David Keen author of the book "Complex Emergencies" writes on OCHA's definition having shortcomings arguing that in the case of 1994 Rwanda, the problem was not so much the breakdown of authority, rather that the "authority" being imposed was "ruthless” and had “vicious efficiency".

Indeed Kenya has always had a government, and the UN Guiding Principles on Internal Displacement stipulate that it is this same government that should ensure that the IDPs receive requisite humanitarian assistance, are resettled and reintegrated back into society. However the Kenya government has mismanaged this obligation.

The Government’s Ministry of State in charge of Special Programmes initiative to resettle the nation’s IDPs has been dubbed “Operation Rudi Nyumbani” (return home) which includes financial assistance and transport among other short- term measures.The causes of displacement and obstacles to resettlement have not been adequately addressed and the Ministry's stop-gap activities have failed to assure Kenyans that the Operation is not just a PR exercise so the government looks good to donors.

There has also been a disturbing tendency where anyone (whether an IDP or an interested party such as the Kenya Human Rights Commission) who questions how an unaccountable government can accountably distribute funds and materials to IDPs are met with torrents of abuse and muzzling.

Queries on government commitment and initiatives to assist IDPs to ensure long-term peace have centered on: poor co-ordination and corruption; insecurity; child and gender based violations; inadequate shelter and compensation for loss. The Kenya Human Rights Commission in an October 2008 report “A Tale of Force, Threats and Lies” even accused the government of forcing IDPs to go back to their homes.

As for the UN and those that adhere to the IDP Guidelines and rules regarding complex emergencies, they have been confined in that they have to deal with the government of day and trust that the government will most effectively and equitably distribute humanitarian assistance. However when the lives of people and those of future of generations are at stake, a dire need emerges to make sure that this complex emergency does not become a permanent one. It is thus imperative that the international community demands that the government ensures that the rights of all IDPs are upheld.

Indeed recent political events have shown the danger of inaction in enforcing strict observance of ethical standards regarding resettlement. Just last week, the government decided to compensate settlers in the Mau forest. This is hardly the first time such a compensation scheme has been conceived, however the common occurrence has been that the majority of the money falls into the pockets of the fat cats who grabbed the land.

The eponymous Ndung'u report which investigated illegal allocation of public land, lists no less than the families of former presidents Jomo Kenyatta and Daniel arap Moi as those who grabbed public property earmarked for squatter resettlement. On this issue, Nobel Laureate Prof. Wangari Maathai was today quoted in the media saying, “… the Kenya government does not have money, it’s your taxes. So if they don’t have taxes they will ask the World Bank to give them money to come and compensate leaders who misused their power (to acquire) land they should never have acquired …”

As it is, the Ministry of State for Special Programmes requires more funds which will come from the National Budget and the excess from donors. Isn’t it about time to first question whether Operation Rudi Nyumbani has been a success and whether indeed the government should still spearhead IDP assistance?

In August 2000, Fr. John Anthony Kaiser, a crusader for the rights of internally displaced persons was murdered. He was vocal speaking out on the injustices meted out to the displaced. However, almost a decade later, even more people languish miserably exiled from their homes.

As it is who knows how many more people will join the ranks of IDPs come the next general election, or for that matter the anticipated constitutional referendum? We also need to re-examine our outlook towards Kenya’s IDPs. In an age of reality television where shows such as Big Brother Africa keep viewers glued to their screens; alas when it comes to our brothers and sisters living in camps we are no longer voyeurs. Indeed, there is no difference between our IDPs and those in Darfur, yet though our eyes face the screen watching news stories on their plight, we no longer see the real suffering; we no longer question why this is happening; we only say a silent prayer that come 2012, we will not be the ones taking up airspace as IDPs.

Is it only in Kenya where we have become immune and impervious to news stories on corruption, impunity and gross violations of human rights? Could this be because this is the country where even those that engineer and carry out grand larceny on our nation’s coffers have the opportunity to transform themselves into televangeslist? Is that why we do not find it dysfunctional to watch the IDPs in their tattered clothes which cover emaciated bodies and hold up despondent faces?

2007 violence, a gift or a curse for Kenya?

By Muriithi Kagai

The Kenyan political landscape is complex and to an extent intriguing at least in my view. We know things are bad, where and why they are bad, who is making them bad, etc. Why then can we not fix them or at least work towards fixing them? A fundamental step towards addressing our problem is to understand that the situation / system is a design by a clique of a few people and it is not in their interests that a permanent solution is found. This system ensures survival of bad leadership and since most of our leaders are really bad, we must understand that they are okay as long as the situation does not degenerate in total chaos. Remember that they were okay as Kenyans continued to butcher each other until they were told that Kenya will be taken over.

Kenya after 2012 is going to be a different country. It is in most times difficult to maintain truth and reality when talking about political matters in situations where the level of democratization is low and where ignorance is high. In these cases, cheap politics demands that you focus on what is popular rather than right. The popular thing might be a lie or a misrepresentation of facts or issues and cheap politicians will go to any lengths to pursue lies just because that is what is popular. This is the reason why you hear politicians making promises that are unrealistic and promises they know they cannot fulfill under any circumstances. They know that they are lying to themselves BUT they know that they are addressing people who can be taken advantage of. Call it deceit or what ever you want to but they will tell you that it is being strategic and what counts is not what you say or stand for BUT a win.

A principled woman or man will tell you that they would rather loose than win through deceit. We have many principled men and women who cannot set their feet in parliament as MPs under current politics. Many cannot dare try while those who tried got rude shocks. Others learnt the trick and traded their principles with mediocrity and sycophancy and they are now in parliament not as principled men and women but politicians of deceit. You know who I am talking about, don't you? They were very vocal during Moi's rule - fighting for "justice" and now that Moi is out of power and they are in parliament, injustices are not issues anymore. Or could they have been pretenders or hypocrites; I don't know. No wonder Kenyans are starting to think that Moi was better.

The real problem

While Kenyans are fed up and ready for change, the ruling elite always takes advantage of such situation by re-inventing themselves so that they look different thereby hijacking the process to maintain themselves in power. If you want to check this fact, check who has worked with who and who has been a student of who in Kenyan politics from the 60s and you will see that they are the same people we are recycling. Then look at elections in 1992, 1997, 2002 and 2007 and tell me who was spearheading the change in all these elections. It is the same people being recycled. If we ever expect change from these sort of games, WE ARE IN A BAD DREAM AND WE BETTER WAKE UP.

What we have in Kenya is recycling of bad leadership. Its not rocket science that bad people do bad things and good people do good things. To expect bad people to do good or be held accountable is pure wishful thinking.

How do you expect someone who has made a career through corruption or other criminal acts to fight his livelihood? Can you imagine slapping yourself very hard on your face? I think we need to wake up to the world of reality. Kenyans are not poor because of ethnic issues. It is years of bad governance. The less than 10% who own more than 50% of the country are not one ethnic group. How this less than 10% is spread over ethnicity is a different matter and I think focusing on that is diversionally. How they love to say that it is one tribe eating when they own posh properties all over and are driving the latest Toyota Prados, Hammers, Pajeros etc. We need to sponsor inter ethnic exchanges so that Kenyans from different communities can see for themselves how other Kenyans are suffering all over in the same way to
expose these liars.

The future of Kenya:

Step 1: A lot has been said and there is probably nothing new coming out of these articles including this one. The problem is reasonably understood especially by the middle class but also among other levels. What is missing is action. Each one of us talks and writes but we somehow think that someone somewhere will take action so in the end no one takes action. Inaction promotes the status quo and we continue talking and talking. Its time to walk the talk at individual level. We need to take action and there is a lot we can do at individual level starting with educating ourselves and those being manipulated. I wish we know how much we can achieve in our own individual ways if we resolved to take action without waiting for someone somewhere someday.

Step 2: Confront the truth and reality and understand that we have bad leadership that has perfected the art of manipulation and reflect at individual level whether you want to face the truth or bury your head
in the sand. Make a decision and take action.

Step 3: Find out what others are doing and link up with them. Fight detractors who have already been misled and are acting as sycophants of the oppressors and do not let them derail you. They are the minority and should not carry the day although they represent the powerful and the rich. Nothing can defeat the power of the people if the people resolve to go forward.

Important tips:

Focus on rural communities, the youth, the low income and other marginalized groups. They are more prone to manipulation and they have year after year been manipulated through violence, intimidation and bribery. We have relatives, friends, civil society groups etc we can reach to at personal level to build communities' resistance against manipulation. People can take money because it is stolen from them anyway BUT they should not sell their country. Vulnerable people think they owe their votes to those who bribe them and this is a problem we must fight individually and collectively. We have a parliament comprising of people who purchased their way up there and we are asking them to be accountable. What a fallacy?

The diaspora should deny these people platforms because they are not worthy being listened to.

Given our stage of democratic process, giving liars a platform is a big mistake we must not continue making. By giving them such platforms, we are endorsing them among foreign governments, our foreign friends, among fellow Kenyans in the diaspora and most important, we are endorsing them back home and consolidating there base of political deceit. The diaspora is revered back at home and endorsing the wrong people amounts to misleading people who do not have the same level of knowledge. We are at least morally obligated not to mislead an already vulnerable population and if we do, we should not complain that our people are making mistakes when we have ourselves misled them and endorsed their mistake. It is also some sort of hypocrisy and deceit and we must come out clean.

Our media must stand up and be counted at this hour of need. Mistakes they made in the run up to the past general elections especially the 2007 election should not be repeated. The media is one of the most fundamental tools for achieving change and we must use the media positively to help achieve national healing and reconciliation knowing very well that most of current leaders are not committed to healing and reconciliation. We must create a strong and sustainable base on which we can anchor the change that we so desperately need. Kenya has many and better men and women who can lead the country and the media should promote a message of alternative and better leadership.

Our development partners must join the oppressed not the oppressor. I will stop here on this one. They know what I am talking about.

At the grassroots, the people contesting local authority and parliamentary seat must meet the standards of a people driven criteria. We must know where they went to school, where they went to work and what kind of adults they grew to be. What do they own and how did they acquire it. Who are their references? Potential leaders must start addressing public rallies from these points of integrity and people must pay attention to this.

As an individual you can educate people on these things and we know men and women of integrity who must stand for local government and parliamentary positions. Forget the presidency and just focus on the local and parliamentary positions. There is no president or prime minister who can mess a country if surrounded by a clean parliament. He or she would be digging his or her own grave. Next presidential candidates should seek their votes and leave us to decide on councilors and MPs because we need to deny them the license or blank cheque to preside over a government of misrule. Given the way these oppressors have ethicized our politics, change can be tricky if we focus on the presidency and here in this article, I argue that the presidency is not important. If we ignore the presidency, this amounts to killing two birds with one stone. We avoid opening wounds of tribal sentiments since we are not talking against any presidential candidate. We would also manage to get change because we would have a clean parliament that would hold the president accountable as well as all other arms of government including supporting economic development because such a parliament would understand that development is a private sector affair and an enabling environment is crucial.

Kenyans should start to prepare to submit their candidature for local government or parliamentary positions and ignore the presidency for the time being. Others should nominate those they think should be our councilors and MPs.

Good professional men and women should now understand that there is a good chance to be in parliament or in a local authority without having to join unprincipled people with questionable backgrounds. You do not have to join these people to be in parliament and it is time for the principled to state that if you can't join them, you can leave them on matters of principle. If good people do not offer themselves for elective positions, from where do we expect voters to get good leaders?

I submit that while we need constitutional reforms, we must understand that bad people will manipulate and even ignore the best constitutions. What can you do when the law is broken by its upholder? I would rather have a weak constitution but good leaders than a very good constitution and bad leaders. We have a chance to have a better constitution and good leaders. If the process of constitution making is sabotaged, we will be okay if we get good leaders because they will later give us a much better constitution.

Make at least 10 of your friends understand this with an obligation to make their 10 different friends understand the same. In this era of technology its amazing how much this can achieve. There are lots of initiatives going on among Kenyans with or without the support of true friends of Kenya. Great ideas start small and in a very humble way.

If we act at individual level, Kenya is not going to be the same again after the 2012 election. It is time to reconcile ourselves and restore our country because the problem is not between Kenyans but between Kenyans and a clique of oppressors and their tricks are now coming to an end. With good leaders, we can begin the process of undoing the evils that have made Kenya to be what it is or should not. Kenya is a country that has all the potential to become a developed country and we will stop at nothing but making it exactly what it should be. 2007 was a gift for Kenya. It has made Kenyans to wake up. We now know that none of us can be safe if the country goes to the dogs. We also know that the oppressors do not care about deaths of innocent people. They only care when their power bases are threatened and that is why they had to listen and talk when they were told by the international community that Kenya will be taken over. So they listened as the country was put under a humiliating experience where we had to be told what to do by foreigners. Before that, our so called leaders could not talk no matter how many people died. It was shocking and it reminds me of the story of Israelites under mercy of a heartless Pharaoh. 2007 revealed how heartless and cruel our so called leaders are.

But it was not in vain that it had to take innocent lives for us to wake up. The many Kenyans who died plus hundreds of others suffering as a result of this violence have woken up the rest of us from a deep and bad slumber. They are the real heroes and heroines. In their tribute, we must change Kenya in 2012 and say never again should we allow our country to sink that low and go through such humiliation.

Read Hon. Gitobu Imanyara's Bill for a Special Local Tribunal here

Business activism: Positively transform Kenya with the 2009 Budget Campaign

As any entrepreneur knows, business in the current economic climate is becoming well-nigh impossible.

With inflation adversely impacting raw material and final product prices, instability as a result of political bickering, a tax regime that places punitive impositions on micro-enterprises as well as dwindling consumer purchasing power, Kenyan small business enterprises are now under threat.

A few weeks ago on this blog, we decried the fact that the way the government to which we pay taxes was spendthrift, positing that if it were a business, it would have collapsed ages ago.

Well the season of the National Budget has come upon us again. And this time we can make our representatives to parliament more accountable by ensuring that government expenditure provisions reflect the will of the people of Kenya.

As the accountability portal Mars Group and the Partnership for change point out:

“The National Budget as presently constituted is enmeshed in corrupt and wasteful expenditure and there is need for Kenyans to educate each other on this so that we can pressure our representatives to scrutinize the budget to identify such expenditure. Savings can be used to boost development expenditure.”

As entrepreneurs are the main drivers of the economy, we should be in the fore-front of such an initiative. For instance we can demand accountability from our parliamentary representatives on the following:

• A reduction in the size of the Government of Kenya via the enactment of a statute pursuant to section 16 of the Constitution to cap the number of Executive Cabinet Ministries; and the need for integrity criteria for public service.

• A reduction of the recurrent expenditure of Government and the setting of ceilings on recurrent expenditure.

• Demand for full accountability and transparency in the External Public Debt Register which records all debts incurred by the Government of Kenya with international multi-lateral, bi-lateral and commercial creditors.

Apart from contacting your MP, you can also write a letter to the Commissioner General of the Kenya Revenue Authority (either when making payments or not) to register your displeasure that you are fulfilling your business obligations, albeit to a government that does not manage its resources responsibly.

Or, you can join the Partnership for Change 2009 Budget campaign to mobilize public support so that the Government of Kenya becomes accountable and transparent in the borrowing and implementation of the funds it collects from the public in taxes.

This time the onus is on us entrepreneurs to make the change we wish to see in Kenya today.

Update: read Kachwanya's take on the upcoming Budget in "A Letter That Finance Minister will never read".

If the Kenya government was a business, it would have collapsed ages ago

"Why would a company hire someone that sleeps on the job, doesn’t complete assigned tasks and demands a hefty untaxed salary?" - Ken M. a Kenyan Entrepreneur, 16th March 2009

The global financial crisis has led to the closing down of many enterprises. Even the Business Daily today in its headline article “Global crisis wipes out call centre jobs” tells of the local BPO industry as being in jeopardy.

Recession-proofing

Indeed “recession-proofing” business has become a buzz word, even amongst local entrepreneurs. Key in the phrase on Google and you get a result of 4,790,000 website listings.

Ensuring that one’s business can swim the tide of global financial currents, means tightening belts, something that many companies are doing as seen in the number of industries laying off non-essential staff.

In line with this economic outlook, wouldn’t it also be prudent for the government that lives off earnings in the form of tax revenue from Kenyans also tighten its belt?

News stories such as lavish spending on tea and flowers are definitely not in tune with the times.

Mars Group Kenya, a local governance and accountability watchdog in a blog posted today “The Government of Kenya is Broke” has raised critical financial management inefficiencies being perpetrated with outright disregard to the Kenyan people. This coming at a time when the same government (which previously prided itself on being self-sufficient) has whipped out the begging bowl for donors to fill.

Scandals ranging from maize to oil continue unabated, whilst we business people are warned of imminent tax hikes. The grand coalition government seems to have a more voracious appetite in ensuring its parliamentarians are kept in the lap of luxury, whilst continuing to exert pressure on small businesses to pay taxes.

The Mars Group blog outlines several spending issues that if the Kenya government was a business, it would surely collapse.

For instance, the bloated cabinet of 93 Ministers and Assistant Ministers costs Kenyans billions of shillings annually. Out of the government’s budget, 24% goes to servicing external debt leaving 76% for services rendered to Kenya. Out of this balance, 85% is spent on recurrent expenditure (i.e. paying hefty salaries and buying the latest SUV’s) whilst only 15% is left for development.

It is this 15% of expenditure that is supposed to ensure that all Kenyans reach a point of financial stability, in order to pay (“as responsible citizens”) taxes.

One does not have to be an economist, accountant or even a high school student for that matter, to see that the flow of funds here is top heavy; whilst unfortunately it is small business entrepreneurs and lower income Kenyans consumers who bear the brunt of this parasitic government. Taxes such as VAT know no class barrier, thus we “watu wadogo” pay the same taxes as MPs who earn tax free allowances topping up high salaries.

No-brainer questions

The Mars Group blog proposes several reforms, which if given in advice to small business owners would seem a no-brainer: For instance,

• Why would a company have a bloated Board of Directors (i.e. cabinet) whilst revenues remain small?
• Why would a company hire someone that sleeps on the job, doesn’t complete assigned tasks and demands a hefty salary (untaxed!)? (our MPs).
• Why would a business owner retain the services of a financial officer when it turns out that money allocated for specific tasks (such as paying for free education) is diverted for other costs (such as buying maize)?
• How on learning that money has been siphoned out of the enterprise (Anglo-leasing style) by the same finance officer, would the business owner just let the matter drop; notwithstanding the fact that annually 24% of the business budget is religiously paid to external lenders?
• After finding out about the siphoning of funds, wouldn’t a prudent business owner ensure that such corrupt loans cease to be paid immediately?
• Wouldn’t an entrepreneur use legal redress so that the business doesn’t have to pay the corrupt loans?

Either way, remaining in the status quo would without a doubt crush the business before too long. The government is only lucky in that it gets free money from taxes without even having to pretend to offer adequate services.

That is until we finally demand that the government also tightens its belt.

Read THE GOVERNMENT OF KENYA IS BROKE: What Mwai Kibaki, Raila Odinga, and Parliament must do to deal with our current financial crisis