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'Dynamic duo' has to get priorities right

  Apr 17, 2013

By David Mugun

Statistics from the International Monetary Fund, the World Bank and the CIA World fact book rank Kenya’s economy at 79, 78 and 81 respectively out of 182 countries.The consistency in ranking makes for an accurate picture of where we are placed versus the world. Our ambition is to attain middle-income status within 17 years if we must attain the vision 2030 expectations. We are aiming to be top 40 or thereabouts.

Such statistics tells us that we cannot afford to walk when the world is running. Former President Kibaki handed power to what he termed “a dynamic duo” who now must face and handle immediate challenges that threaten to keep us sliding down the world economic chart, if little is done.

For starters, President Kenyatta has correctly indicated that he will support home-grown products. The best support is to lower the cost of electricity as it is a critical factor of production.

Egypt is ahead of us on this account and our products stand no chance against Egyptian products given that it is a member of Comesa just like Kenya. A bold yet necessary step is to spend about Sh80 billion within one year to develop further, the geothermal-generated power and nuclear power, which is by far, our cheapest option.

Let other areas go without much funding for a year so that our power cost is brought down significantly. This is no rocket science for the dynamic duo.The quality of service delivery in government departments has improved compared with levels witnessed a decade ago but it seems to have been more of a project as opposed to a continuous process.

We need no survey to tell that the public service lags behind the private sector in all fronts of efficiency and tenacity to deliver with consistency, desirable results. The irony here is that it is the private sector that provides the revenue that in turn pays our public sector. Here again, the dynamic duo know all too well what is lacking. They both own private sector companies that exhibit efficiency and tenacity.

It will be painful to all Kenyans, to see that companies associated with our dynamic duo outpace public sector performance yet they know what it takes to improve service delivery.

The Deputy President has been quoted as saying, that it is “time to roll up our sleeves, pull our socks and deliver to Kenyans.” We are watching. Tax collection, is a double-edged sword depending on where one stands. It has been stated several times that tax leakage costs the country about 50 per cent of potential revenue.

Many initiatives have been put in place to enhance revenue collection but a time reaches when the law of diminishing returns is reached. It is even worse, when we are reminded, that insanity is doing the same things over and over again and expecting different results. The tax leaks will not improve at all if we do not change our approach.

We are wasting away useful brains that have specific industry experience and understand how different industries either avoid or evade tax. I am not against the young graduates here that Kenya Revenue Authority recruits annually but let us face it; return on investment for this group is about five years.

The next elections will be done by the time those recruited this year begin to bear real fruit. A mix of young and old will further enhance tax collection. Support a system that hires a few older experts per industry, say people with over 20 years of experience.

These people will then be given contracts and the support needed to track and deliver more taxes thus minimising on obvious leakage. A reformed smuggler of goods from Kismayu can help to bring more businesses into compliance.

We must shift to trade diplomacy and shun the déjà vu dinner diplomacy. We have a chance to reorganise our diplomats such that those who can deliver on the country’s priorities merit the available positions. It should not be automatic, that diplomats in America and India can be switched.

To be The Indian High Commissioner, must be based on our priorities with that country and who is the best fit. Must we retain traditional ties for keeps sake or must we rank them based on today’s merits? Diplomacy must be about wealth creation.

Food security is our single biggest source of embarrassment. Middle-income status does not auger well with self-imposed food deficits. Again, our dynamic duo are in big time agribusiness and the learnings from private business, must be put to use in the over one million acres of arable land that remains unutilised in Kenya.

A new method as used in Argentina is proof that no new silos need to be erected. Weather-proof bags left on the farm can store grain for long periods. Irrigation and a local fertiliser factory are a must have.

Insecurity in Kenya is very disturbing. Guns in the wrong hands are worrying. The Al-Shabaab threat is real. Internal threats must be neutralised before external threats can be dealt with.

The government has the instruments of power at its disposal. At its best, the Flying Squad was effective in dealing with crime. What happened to them or in its absence, what plans do we have?

The Elemi Triangle and the Migingo questions must be answered ones and for all. Are they in Kenya or not? South Sudan and Uganda are good markets for our goods and services and these boundaries must be demarcated decisively so that we make come true the words of Uganda’s President that “East Africa is also about trade.” We may lose more territory if we continue burying our heads in the sand.

After all the above are dealt with, then the oil question must be answered. It took Ghana 42 months from discovery to mining the first barrel. Is ours just a nice story to keep us patriotic or has the countdown begun? Shall we outdo Ghana or are there complications? Oil is a resource that if used well, will move us quickly up the world’s economic list.

To our dynamic duo, you have your jobs cut out. Yours is to make our lives collectively better just as you were taught that you must always leave a place better than you found it.

David Mugun is the Director of special Projects at Strathmore Business School and the author of the books “How to Undo Life’s Airlocks” and “10 Critical Success Answers for SMEs” and the Director of Special Projects at Strathmore Business School.

Source: Business Daily

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