During the budget speech Finance Minister Njeru Gitahe projected that the country would have a 5.2% growth during the year and gave several factors explaining how the government is working towards realising this dream. He was sure it would be a successful year for Kenyans and the economy would grow, despite it being an election year; and Kenyans couldn’t be more pleased.
In a report released a couple of days ago it has been realised that China’s economic growth has slowed down to 7.6%. “I would say probably the worst is over and we are going to see some stabilization and even improvement in growth in the next quarter,” Sun Junwei, China economist at HSBC in Beijing said. In case you missed it I will point it out, he said worst. This “worst” is a strong 2.4% percentage points higher than Kenya’s projected rate of 5.2%. Furthermore it is 0.8 percentage points lower than Kenya’s all time high of 8.4% in September 2005.
Many arguments can be made for this. I have a friend who said “but they’re China, and it’s relative.”It isn’t. Growth is a rate of change. There is nothing relative about it. If anything by virtue of us being a smaller economy we should be at an advantage (Ksh 1 to Ksh 2 is a 100% increment. A Ksh 1000 to Ksh 1,500 is a 50% increment). Also I really don’t think that the “it’s China” argument makes any sense. With over one billion of them their economy has a lot more brunt to bear that our economy has to carry with a meagre 41 million people.
So what are we doing wrong? Well, for one corruption here is not punishable, unless of course you offer Mr PLO KSh 100,000. How dare you insult the state of his bank account with such a small amount? Meanwhile if Mr Chang took a bribe of ¥1 he will be killed, twice for good measure. Surely that can’t be it though, Mongolia was at 14.3% in 2011(first quarter) and it is perfectly legal to be corrupt there, although it is strongly frowned upon by society. It could be argued that we are currently doing better than most of the countries that are in the Eurozone; but it should be noted that they are not the ones doing the catching up, we are.
For once though it can be said that the government is on the right track, with a tight monetary policy, and an even tighter immigrant policy it could be argued that we will get there eventually. Then again we have just struck oil, so pardon me if I am a little tentative about keeping my hopes up. After all, the oil curse might just be real.