The Recipe For Our Economy

BY JOBLESS MJAMAA N GEORGE

Adapting to the fatal errors of covid-19 has made me utilize my unemployed mind by articulating workable strategies that will lower the heat during forthcoming harsh economic times. Am pissed by how we approach the pandemic by copy pasting method.

Copying in an exam room didn’t do well neither will it work for Kenya, the world is sitting for this very exams and Africa is advantaged by the window period before wide spread. If you are copying, then paste everything.

They have huge statutory reserves, we have debts, stable food stability, we import food, best health system with 1:1000 ICU facility we have 1:100000, not to mention the copied joke of self quarantine in uncontrolled jobless population.

I do appreciate the shreds of tenderness and concerns by the government to its taxed citizens, but treating this article like our previous public cry for proactive approach at the airport as hullabaloo will be the gist of Kenyatta’s legacy.

Dear President Kenyatta, an experienced finance minister. You have a number of analysts and advisors on payroll but take mine 4 free, copy pasting will fail us at 1000 infections figure. If we accept the facts, then we will stand strong to the occasion in the spirit of Harambee.

We are playing myopic, putting 90 days projection to corona errors will leave us in a financial, social, economical and even spiritual quagmire (corona might overstay much longer and overwork our efforts).

1st world countries are rolling strategies to rescue economy and social welfare. Curfews and lockdown are not exceptions even animals can testify to hibernation but it will attract high eating habits, low purchasing power with low production. Appling wrong strategies is playing zero sum game with the hungry population, the outcome is left for a pamper mind to explain.

At 200 infections we have red indicators from the strategic food reserve SFR, what of the worst days to come. Solutions; short term viable option buy plenty of food before food price volatility index unfriend you, long run invest in water supply and agriculture like never before.

Financial approach

You need funds about half a trillion to manage the virus and rescue the economy for about 6-9 months. First (a) budget reallocation:cut costs and expenditure budget across the board up to counties,push for 30% salary cut in all civil servants apart from those active in corona errors (operate from non comfort resources zone).

Second go for what we are good at (borrowing), external finance. Our GDP has leverage on lenders, eg IMF and World Bank. Debt management reviewed intrusively, possibly debt restructuring and sovereign default being viable options in line with United Nations article 2(4).

Economic approach

Private sector needs help during this financial distress that is leading to high layoffs. Being victims of the fundamental risks I expect proactive risk management to avoid moral hazard because main point isn’t the economic recession heat but the businesses we retain to propel recovery process.

Giving affected sectors soft loans with reasonable tenure based on their recurrent expenditure minus salaries.

Working out leasing contracts across the board with the landlords based on their latest tax file. e.g landlords reduce rents by 20%, collecting 50% from tenants then 30% will be claimed in tax relief after the period of distress.

Take the entire employees and small scale business liabilities by approving 60% of their incomes as monthly soft loans based on their tax file. This will trigger multiplier effect and cash flow. With support of your fiscal policy, we have longtime immune the economy opposed to buying maize to feed people or issuing money, the government just can’t feed people for 6months it has small window for borrow and spend fiscal stimulus. During payments of the loans great capital will be realized.

Is the strategy corrupt free?

Yes, The process is corruption free as the bank and Kenya Revenue Authority are purely accountable. Huduma number could have worked well but let me not go there but use options at hand, have mention KRA PIN everywhere. KRA pin being main collateral becomes the new work permit in Kenya. The loan will follow the KRA pin at the convenience of the borrower getting another income.

Loan risk management

The Kenya Revenue Authority and bank being accountable will manage the lending process and risks. 10% interest can be realized to manage long term risks.

NOTE: Based on Keynes theories approach, I have airtime to further discuss the known unknown, holistic thinking for the interest of the social welfare. Do Kenyans trust and have hope in the government?