State of our economy.

AzimaWellness Foundational Talks 14/2019

State of our economy.

The truth is we are doing badly as a Nation. Our economy slumped by 4.9% growth in 2017. Things are expected to easen up in 2019 after the Minister for Finance, Hon. Henry Rotich projected a growth of 6% but the reality on the ground shows otherwise.

According to the latest statistics from Savings Societies Regulatory Authority (Sasra) and Economic Survey 2017, up to two thirds of Kenyan families are borrowing money for food. This is a worrying situation. Instead of borrowing for business capital, we are borrowing to spend. This means if the credit pipes are turned off, 40% of families will sleep hungry!

Where this disconnect?

According to statistics, the people who are carrying the biggest burden are shop keepers and mama Mboga. They find themselves in a catch 22 situation. They sell perishable commodities like vegetables, fruits and milk. If they do not sell them on time, they will perish and record 100% loss. If they give them on credit, chances of default are very high.

https://www.nation.co.ke/news/Kenyans-troop-to-mama-mboga-for-credit/1056-5068574-oiv3ka/index.html

Besides, they need money to restock. Most are finding themselves unable to buy the same quantity of stock due to default rate by customers. Some customers accumulate the credit purchases then move to another seller . They avoid the shop they owe because they feel guilty . This is bad for business. There is little the shopkeeper can do to enforce collection unlike secured credit with big lenders. This is killing the poor trader slowly but surely.

We are a country that has put emphasis to developing infrastructure like super highways and SGR but forgot to empower the 40% of its population unable to feed itself. We need to change our development model . infrastructure alone without developing the people to use of these infrastructure is to generate wealth is not sustainable.

Borrowing is living tomorrows’ life today. Big question is what will do when tomorrow comes? How long can we sustain this worrying situation?

Truth is there has been a conspiracy to make things look good. I suspect this is done at the highest level of government for political reasons. Recently there was an attempt to tinker with unemployment statistics reducing it to a mere 15% from 48% as per this survey. This is laughable and a hard sell to anyone who lives in Kenya.

The truth is our economy has been shedding more jobs than it has been creating in the last three years. Only last year there was a report that BAT is retrenching yet more staff. Banks and Insurance sector who are among the major employers that pay good salaries have shed off too many jobs in the last 5 years. It is sad that in an economy like ours, we have slightly above 74,000 people earning above 1000 dollars per month.

I was invited to speak in a Sacco annual general meeting on financial wellness early this year. I caused a stir when I told the members that our problem is we put too much premium in owning a house. It is better to be a tenant in th current market than to own a house. Saccos have changed from a saving platform for members economic development to a kind of a welfare fund to pay school fees and to buy a plot to put up a house. This was not the original goal of Saccos when they were formed. We need to re-establish the noble goals of saccos or we do away with them.

Our biggest undoing is lack of financial education. We are not taught how to relate with money. We are thrown into the deep end of a shark infested pool without being taught how to swim. This is dangerous for all of us. We cannot allow things to get worse than this. Our economy will collapse .

Currently, the economy is unable to sustain business. If 45% of our income goes to food, what is left for other uses is not enough. If 3 out of every 4 adults earn a paltry 15,000 shillings per month, the situation is serious.

Keep it here for what we can do better and how to relate better with money.

With profound respect,

Coach Maina Azimio.

ICF- Accredited Certified Professional Coach,
Conference Speaker and Corporate Trainer in Wellness.
Tell: 0704 561 095 , 0722 516 896
Email: mainazimio1@gmail.com
Websites: azimawellness.com/mainazimio.co.ke
Follow me on Facebook; Maina Azimio/ Azima wellness Consultants.
Twitter; @Azima_Wellness
LinkedIn; Maina Azimio
YouTube; Maina Azimio.

Leave a Reply

Your email address will not be published. Required fields are marked *

^
Call Now Button