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.

Youth Disaffection: the elephant in the living room

This week both online and offline conversations have been revolving around Umar Farouk Abdulmutallab, the 23 year old engineering student who was apprehended as he tried to detonate explosives he carried onto a Christmas day transatlantic flight into Detroit.
 

However, Abdulmutallab somehow does not fit the stereotypical profile of a terrorist for most. The young man is highly educated and in fact was raised in a well to do family - his father is a prominent banker and former Nigerian Minister. As a Financial Times article says:

"Other Africans, from Comoros, Kenya and Somalia, who have been involved in al-Qaeda activities, have come from humbler backgrounds. But Mr Abdulmutallab was born into Nigeria’s elite, and there is little in his African background to suggest he was a terrorist in the making".

So the question many have been bandying about is why on earth would this young man feel that he had nothing to loose and everything to gain by not only killing himself, but also taking down 278 lives with him?

Yes, Osama Bin Laden hails from a wealthy Saudi family but he is the kingpin of Al Qaeda. The actual foot soldiers have tended to be not as well educated or rich. Towards the end of 2009, stories in the media said that the Somali militant group Al-Shabaab was recruiting Kenyan youth. However, unlike Abdulmutallab, these youth come from an environment of abject poverty coupled with high rates of youth unemployment. They are the ones with nothing to loose and everything to gain.

A young person, say during Kenya’s post election violence period would probably think twice about setting fire to someone’s else’s property if they had assets of their own. However, as is the case in Kibera in early 2008, they not only burnt homes where they lived; they burned down shops where they bought their food; and they also burned down the petrol station where they bought kerosene to cook their food from the shops. In short these disaffected youth had nothing to loose, and everything to gain.

Like Abdulmutallab, there is a new face of disaffected youth emerging. These are the ones who though being graduates, have no jobs or alternative opportunities to create meaningful and sustainable livelihoods. These are the white collar car-jackers and hostage takers demanding ransoms for well known kidnapped personalities.

Before it may have been easy to ignore poor youth that take to the streets and engage in crime. However, the number of disaffected youth is coalescing across social and economic divides so much so that the carpet can no longer cover the elephant of youth disaffection in the living room.

Umuro Wario’s reinstatement at Kenya’s Youth Fund is a victory for public officers committed to fighting corruption

The government’s decision to reinstate Mr. Umuro Wario to continue serving as the Chief Executive Officer of the Youth Enterprise Development Fund should be highly lauded. It’s a point of victory for public officers who risk their jobs by committing themselves to fight corruption.

Kenya’s biggest problem with the war against corruption has always been having the corrupt have their day whenever they fight back. This has happened to so many competent people before. A number of committed and hardworking officers have often lost their jobs whenever they showed determination to fight graft. A few years back it was confirmed that in Kenya, corruption fights back. It happened to Goldenberg whistle blower David Munyakei who lost his job and died in agony after he revealed how Kenyans had lost billions of shillings through the Goldenberg scandal. The same nature of machinations worked so hard to remove true anti corruption crusaders from transparency international. It was such kind of behind the scene political games by some board members that two very competent CEO’s Mwalimu Mati and Gladwell Otieno were consecutively removed from TI Kenya. Transparency International is just one example among many where officers committed to sincerity end up losing their jobs because of the greed and immorality of some of the board members of those institutions.

The minister in charge must be lauded for taking a bold action and making the truth carry its day by re appointing Mr. Wario. The minister has shown that if we all work for the truth, the just will always get justice too.

The initial sacking of Mr. Wario was like condemning those who fight corruption within the institutions where they work. This is because the ground of dismissal was based on the fact that he didn’t cooperate in the approval of some questionable deals pushed by the board. He must be lauded for standing strong in the interest of Kenyan youth when he refused to approve a ‘loan’ of ksh.300million to a Canadian NGO. Its noticeable that some politically connected board members wanted to use their political influence to blackmail the CEO into approving projects that mattered to their own selfish interests and not in the interest of the Kenyan youth.

It’s important that the minister was able to rescind her own earlier move of sacking the YEDF CEO after finding out the truth.

As the minister appoints new board members it’s important to ensure that new faces are put on the board to make the YEDF operate without any external coercion from various political interests as it has been before. The minister should now move to ensure that the board is fully reconstituted to include people who will work in the interest of the Kenyan youth and not those who will end up arm-twisting the CEO to give’ loans’ to foreign NGOs. A new board I believe will come up with a new way of implementing the youth projects and also oversee the funding of the youth groups by merit and not through political manipulations.

Wario is one of the competent young people who are emerging in providing leadership in different sectors of our economy and it’s wrong for individuals to use tribalism or any other form of bigotry to sabotage such talents. He is also is famed for having rolled out the audit of the Kenya’s free primary education when he worked for the ministry of education.

I really wish that other ministers and government officials emulate the youth and sports minister Prof. Hellen Sambili and stand and support the truth always whenever circumstances of this nature arise. Through this, we shall achieve a lot in our war against nepotism and all other forms of corruption. It must be fought from all corners and sacking public officers who help fight it is not one of the methods of ridding our society of graft.

FWAMBA NC FWAMBA

Kenya's Youth Council Bill is merely a means to keep the old guard on top

Kenya's National Youth Council Bill 2009 came up for reading this week in parliament, though lack of quorum once again caused some delay. Though this should be cause for celebration for the country's youth movement, several clauses illustrate the government's inability to respect the needs and demands of Kenya's youth.

Indeed the Bill is ambiguous even when it comes to the definition of who actually constitute the youth. In the Bill's preliminary, the youth are termed as persons between fifteen and thirty years. However,the United Nations categorises youth as those between the ages of 15 to 24 years old. And for one to benefit from a loan from the country's Youth Enterprise Development Fund, one has to be between the ages of 18 to 35 years.

Then there is the issue of actual youth participation in the proposed Council. Section 5 of the Bill states that the Chairperson shall be appointed solely by the Minister of Youth Affairs & Sports. However, she need not even consult with youth groups when making her decision, so she could appoint a geriatric if she chose.

On further perusal of the clauses regarding the composition of the Council, it turns out that it is not only the Chair that could turn out to be old. Apart from the traditional practice of having permanent secretaries from the parent ministry and the Treasury in addition to the Attorney General (or an appointed proxy), the Minister also holds sole powers to appoint six other members to the Council. The clause once again does not insist on any consultation with youth groups, and also has no mention whatsoever of the age of these members.

Further, the Chief Executive of the Council can be as old as Methuselah as far as the Bill is concerned. This is the same officer who should serve as the face of the Council and be the voice of the youth to the Council members, yet the Bill omits to mention that they even need to form any liaisons with the country's youth groups or have any prior experience in youth policy making.

The staff of the Council too do not have to be youth. And remember that it was only a few months ago when the retirement age of civil servants in Kenya was hiked up by five years to 65! Seeing that the government claims to be striving to implement austerity measures, most likely the staff will be deployed from other government ministries; so who is to say that the Council offices will not be manned by 59 year olds? This in the same country where nearly 10% of the total population are unemployed youth, stinks of the same insensitivity government policies have had towards the Kenyan people.

The bid to control the youth through this reactionary document, also rises higher up in government echelons, not merely resting on the shoulders of the Minister of Youth Affairs. The President who himself is inching closer to 80 years holds the sole power to appoint the Chairperson of the proposed Advisory Board to the Council. This is the same person that oversaw the re-appointment of the oldest civil servant in Kenyan history back to the Kenya Airport Authority! Even scanning appointments to commissions and government agencies, it would be more in keeping to norm for the President to appoint someone over retirement age, this time not even having to consult with younger MPs let alone youth organisations themselves.

But there is a glimmer of light where the advisory board is concerned where the Minister of Youth (again!) has the power to appoint eight representatives of youth organisations. However, yet again the youth are locked out in getting extra seats on this board by the following factors:

• Though one member must be nominated by the Kenya Private Sector Alliance, to be a member one has be an association or a corporate entity and fork out at least Kshs. 5,000 (US$ 65). Youth entrepreneurs generally tend to be cash strapped, and thus more likely to be unable to even afford this sum, precluding them from such a nomination.
• Including only the Commission of Higher Education to represent the education sector ignores the millions of youth who never had or will have the opportunity to benefit from tertiary education.
• The National Economic and Social Council has a small minority of youth members, who once again only represent the creme de la creme of industry and financial services in the country. What about the informal sector entrepreneurs who form the majority of business activity in Kenya and employ 75% of Kenyans of working age?
• Finally where are the nomination categories that will nominate members to press for the rights of rural and urban poor youth?

Even the experts that are supposed to advise the advisory board do not have to be youthful. To us, the best expert is the one that is living the life - the youth themselves!

Another toothless dog?

It seems that indeed this proposed Council is once again a PR gimmick of the government, a mere toothless poodle to appease and control the youth. Under the Bill, the activities and mandates of the Council are only a duplication of what national youth movements have already being doing for eons. The proposed Council pales in comparison to the youth council in Rwanda, which even has enough power to elect members to the country's Chamber of Deputies, the second chamber of parliament.

As Hon. Denis H. Obua MP of Uganda writing earlier on the yipe.org blog comparing the mainstreaming of youth policy in his country to that of Rwanda commented:

"My observation was that issues of the youth are given top priority by the Rwandan government.

Their youth councils are one of the best supported in Africa and the Ministry of Youth Affairs is considered one of the core ministries ... But does the Rwandan government have more resources than Uganda’s? The answer is no, but issues of the youth attract top attention in Kigali".- Govt crippling youth efforts to live better, November 21 2008

Though the Kenya Bill tries to promote fresh talent by limiting the number of years one can sit on the Council or the Advisory Board to three years, a better measure would be to ensure that the main decision making powers rest with the youth membership, while the permanent secretaries and Attorney General's representative act as advisers to ensure they act within mandate and the law. The maximum limit for the youth Council members can be either 30 or 35 years, after the Ministry of Youth finally settles on one age. After that the Council members should retire.

Also the powers of the Minister of Youth to hire and fire should be curtailed, by insisting that there should be some consultative process with the youth of Kenya, before embarking on such actions.

Robert Mugabe as COMESA’s new poster boy bodes ill for trade in Africa

The 13th Common Market for Eastern and Southern Africa (COMESA) Summit postponed twice since 2008 due to Zimbabwe’s political instability, is ongoing with preliminary ministerial meetings. The Heads of State summit is set to commence on June 6th where Robert Mugabe will officially take over the helm of the trading bloc from Kenyan President Mwai Kibaki.

According to COMESA’s vision, the regional union is meant to “be a fully integrated, internationally competitive regional economic communitywith high standards of living for ALL its people”. COMESA’s chosen approach to achieve this is through development integration involving a combination of trade development and investment promotion.

Mugabe: The Right Man For The Right Job?

At a time when Africa has been hit hard by the worst global recession, it is inconceivable that a man who single-handedly crushed his own country’s economy can be placed in a position over the economies of 19 member states with a population of over 400 million.

Mugabe has ruled Zimbabwe with an iron fist for the past 29 years. His past actions are in stark contrast to the bloc’s Fundamental Principles as enshrined in the COMESA Treaty which include the recognition, promotion and protection of fundamental human rights; commitment to the principles of liberty, fundamental freedoms and the rule of law; maintenance of peace and stability through the promotion and strengthening of good neighbourliness and promotion and sustenance of an accountable and just democratic system of governance.

However, the Mugabe hegemony has overseen countless lives being lost most recently from cholera which even spread across borders. Torture and extra judicial killings to muzzle opponents have also been widely used with the Zimbabwe Human Rights NGO Forum reporting more than 20,000 human rights violations including 3,000 acts of torture since 2001. Average life expectancy in the country since 1998 has fallen from 55 years to a paltry 35, in essence meaning that a Zimbabwean has a strong chance of not outliving their youth. Unemployment remains rife with over 90% of the working age population being jobless. Maternal and child health has degenerated to the point where nearly half of all Zimbabweans are at risk of malnutrition and starvation, and a child born in Zimbabwe is the most likely to die in the entire African Continent.

All this misery led to over a quarter of Zimbabwe’s populace fleeing the terror and misery. Yet Mugabe remains to this day either unrepentant or maybe unaware of the devastation he has wreaked on his country. He has numerously been quoted pointing fingers blaming his people’s woes on the British, Americans and any country he perceives to be at fault. Individual Zimbabweans who dare to question his policies have been branded as puppets of the West, overlooking the fact that he as well as his coterie of greedy associates have over the years looted the Treasury and in turn messed what was once seen as the breadbasket of Africa.

As a report The Zimbabwe Papers: A Positive Agenda for Zimbabwean Renewal concluded, the crisis situation in Zimbabwe is solely due to "policies adopted, decisions made, and actions taken by the government of Zimbabwe" – the ZANU-PF government of Robert Mugabe.

Nothing except for a fragile unity government has changed since November 2008 when the majority of COMESA heads of state who had been invited to attend the postponed summit, categorically told the Zimbabwe government of the day that they would boycott the summit.

Robert Mugabe does not stand for the promotion of trade. Hyperinflation and excessive government regulations have heavily penalised the country’s entrepreneurs. Hyperinflation reached a mind-boggling 231 million percent. His accomplice in looting state funds, Central Bank Governor Gideon Gono remains in office. Mugabe even had the temerity to declare that his lieutenant Gono would remain in office up until he leaves office come 2013.

On the authority of Mugabe, Zimbabwe’s Central Bank exercised imprudent monetary policies which included flagrant printing of money regardless of the impact on inflation and the ordinary Zimbabwean. Fiscal policies enforced punitive lump taxes on businesses, further hampering the chances of success for enterprises. Criminality and corruption were the order of the day, with embezzlement, kidnappings and all other manner of vile strategies being used in order to retain control.

The country’s standard of living fell by 80% in the last decade. Even the local Zimbabwe dollar has been suspended. Public utilities were progressively canibalised till the water system became contaminated, electricity erratic and fuel became so scarce that it's market value became akin to gold. Workers in industries were similarly punished when even their health became compromised as a result of a health sector that could no longer provide even the most basic essential drugs.

According to the Ease of Doing Business reports from the World Bank’s International Finance Corporation, it takes 96 days to start a business, 481 days to comply with licences and another 30 days to register a property. Zimbabwe also currently ranks 7th worst on the World Bank’s Trade Restrictiveness Index.

The years of destruction of social goods now means that Zimbabwe needs at least US$5 billion to revive its almost dead economy. Local industry which should be in the forefront of re-energising the economy virtually collapsed under Mugabe’s totalitarian regime. Production costs are hardly competitive within the COMESA region let alone the rest of Africa. The Zimbabwe papers report laments that Zimbabwe has become one of the worst places to start a business. So how can the same person responsible for this degeneracy promote trade? It beats belief.

As the Corporate Foreign Policy blog writes: Mugabe has created a situation so horrible that if he ever got to the Hague, they would need to invent a new charge for the man.

Though Zimbabwe’s economy has slowly revived after Mugabe and Morgan Tsvangirai formed a coalition government, a lot remains to be done. However, you cannot be part of a problem as well as part of the solution.

Why is it that the donor community is placing conditionalities on loans such as respect for human rights and the rule of law on Zimbabwe, yet COMESA whose basic tenets rest on the same principles cannot insist that Zimbabwe implements such measures? To elect such an individual, calls into question COMESA’s mission and role in improving the living standards of the over 400 million Africans it serves.