By Khalwale James
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This is how Kenya looked like in 2008 after the disputed elections between president Kibaki and Prime minister Raila Odinga. economic analysts point at the post election violence as a source of economic turn-down whose effects will be felt for another 15 years. Investors are finding it hard to settle back to their financial positions after a lot of property was destroyrd during the violence. This photograph was taken from Kakamega town in Western Kenya in 2008. This place was not hit as much as Nairobi, rift valley and Nyanza. Picture by Khalwale James
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This trader in West Pokot district is struggling to have ends meet after his Mango business suppliers from other parts of the country were drastically affected by the post election violence aftermaths. hopefully, business will pick up normally after a few months.
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The fact that post election violence visited the country a few years ago, Kenyans developed fear for savings and venturing into investments. The economy has therefore been characterized by high inflation rates leading to outcries of poverty.
Kenyans however understand that savings and investments boost the economy. An investment therefore acts as an insurance policy for one’s life and the beneficiaries. It also acts as a tool for self responsibility, self reliance and a source of economic empowerment. This is especially salient to young upcoming individuals, the youth. Saving and borrowing are a method that improve our being and therefore a security to the economy.
Economic recovery
The Kenyan economy is still recovering from a 1.7 % to the targeted 4% by the end of this year. However, there has been an observed reduction in the saving patterns of Kenyans since the post-election violence because of high inflation rates and lack of capital which have caused an acute fluctuation to the economic growth pattern.
Saving, however, has not been the issue of concern amongst most rural dwellers who on practice savings and investments on small scale in comparison to the urban people. Town dwellers have easy access to banking facilities which enable them save little cash or borrow bank loans for investments.
Most of them are also bread winners to their rural counter parts and must just work out ends to meet. Indeed, Kenyans are bright and can utilize their intelligence in saving and investments to help make a bright future
Saving and investment patterns are slightly different for the two groups with rural dwellers specializing in the agricultural economy whereas the urban population try in the commercial sector such as public transport, shops, industrialization among others. Whichever the route, Kenyan can easily access job opportunities wherever they are.
Saving or borrowing to invest?
The job opportunities that the government promised Kenyans during their accent to power in 2007 is not actually working despite efforts to introduce a youth fund, CDF, Kazi kwa Vijana and a few others.
Institutions mandated to take care of these financial avenues to the youth are very corrupt and are simply working on patronage. A few funds (loans) disbursed so far cannot be retrieved because of the culture of free things instilled among some of our people. The fact is that we must learn the hard way to be self dependent.
Borrowing is tricky especially in a countries with less economic stability. Inflation and fluctuations particularly hinder buying of shares and investments.
Over taxation is bound to occur if the currency value changes from time to time. However, borrowing is encouraged with the observed low employment rates with jobs reserved for a few.
Borrowing will help in two major ways: It will create economic empowerment; and will encourage viable and profit oriented investments.
Economic empowerment
Loans will enable people to venture into investments which they cannot managed on their own. It is a partial solution to unemployment. Currently, the government lends money to the Youth as capital through the Youth Fund and this has promoted youth empowerment.
Well controlled borrowing will enable young people to feel esteemed with their education which would have been otherwise useless.
Demand for security such as pay slips or title deeds to give out loans is still a major outlandish to many which the vulnerable groups lack. Although a few financial institutions are silent on this, they should focus more on ability to repay rather than securities.
Profit oriented investments.
Normally a specific repayment period at a particular interest rate is assigned for each loan granted. This demands hard work, proper investments and strictness to the loaned person who in turn strives to make profit and repay installments as fast as possible.
This is used as an advantage for economic growth by enabling risky but profit making investments especially where groups amalgamate to venture into such. It is true to assert that people work best under pressure. Agri-business and Jua Kali are salient investments schemes.
On the other hand, whereas saving can be done by anybody who keeps aside a shilling that could have been spent on impulse or a chewing gum, avoiding unnecessary expenditure with the accumulated amount in future is very involving and requires self discipline.
In economical terms, saving describes the act of proper use of resources and sparing some of which can be used productively to cause economic growth.
Since this method is the cheap and readily available, why should we not adopt it? No one can survive without food for a month and therefore each person can afford to reserve part of this daily meal for a saving.
The main challenge to saving however is poverty with a life of hand to mouth and that the little available is not even enough to allow the saving.
According to a report by the World Food Organization, about 85 percent of world population Kenya inclusive, live below the poverty line. It further states that 85% of the world’s wealth is controlled by the developed nations who form only 15% of the world’s population. This means that many poor people will continue to suffer if they don’t revolutionize.
With good investments, we can self reliant free from dependence from the developed world who often come with their own ultimatums. The economy will grow from the taxes we pay the government and insurance for ourselves and our beneficiaries will be assured.
We shall actualize ourselves with full self esteem and will access more financial requirements from banks because of security from the investments, a preparation for powerful investments which will quickly raise our living standards.
Buying shares in our stock markets and companies, education, business, agriculture and jua Kali are some of the investment avenues we can venture into.
The government should help Kenyans to fight inflation rates. Let the parliamentarians pay tax to pay for some of the expenses left to the common mwananchi. Also if bank would lower rates and solve the issue of securities to the convenience of low income, the problem of unemployment and associated crimes in the country will end and these collective activities will enable fast economic growth.
