Fiscal packages, macroeconomics, microeconomics, economic bubble, recessions, capacity supply! All these large financial terms and all we want to do is shop for clothes and shoes – I speak for myself here and a certain partner in crime, whom I shall not name but she knows herself) that’s what money is for, isn’t it? Given, there are more reasonable people out there who actually want to invest their money in some company, others who save for their future house and others who want to start businesses or buy some land.
We all have one thing in common though; we want to spend our hard earned money. Chairman Mau, communist leader in china, said “to be rich is glorious” and I completely agree with him, money can do beautiful things for you if you understand how to use it that is. I am here therefore to prove that whatever happens in the financial world, the world filled with the big fancy financial-like terms, affects the price of the nice turquoise high heeled shoes I saw the other day.
What is Policy?
Better yet what is Kenya’s economic policy? Policy according to – you guessed it – the internet, is a principle or rule to guide decisions and achieve rational outcomes. The second part of the definition is that policy is a statement of intent or a commitment to you and I, the voters. So an economic policy is a set of guidelines that shows the country how to make money and what to do with the money we’ve made. Or if I’m all stuffy like I’d define an economic policy as a set Actions taken by the government to influence economic welfare of a country via monetary or fiscal policies.
So, what are our honourable ladies and gentlemen cooking up for the country?
Well our economic policy is found in the highly publicized, trumpet sounds, vision 2030. Yes ladies and gentlemen, there’s like, a home page, and like, all with Kenya’s vision for like, the future? It has lots of colour too. But I digress. Kenya’s vision 2030 is divided into 4 major pillars and these include the economic pillar, social pillar, political pillar and something called the enablers and Macro. Under the economic pillar, Kenya’s economic hopes are summed up in these words “The Economic Pillar of Vision 2030 seeks to improve the prosperity of all regions of the country and all Kenyans by achieving a 10% Gross Domestic Product (GDP) growth rate by 2012. “
Wait a minute, for anyone who doesn’t know what GDP means – yes, they exist, stop judging – GDP stands for gross domestic product and it’s a pretty big deal and acts like a gauge of an economy’s health. Calculating GDP is, like, really complicated but you can do it in two basic ways: adding everyone’s income for the year (income approach) or by adding what everyone has spent in a year (expenditure approach). So how does this affect whether or not I am getting those turquoise heels?
Well, GDP growth does indicated how productive a country is, so it is important to know about it. If our economy is healthy, you normally have low unemployment and rise in salaries because businesses requiring labour to meet the demands of a growing economy. Growing economies mean that there are more jobs for a bigger number of people in the population and therefore a raised standard of living. And here is my favourite part, if more of us have access to jobs and salaries, it means we can buy stuff and if we can buy stuff I can get my shoes (the down side to this though is that many other women can buy the shoes too so I may not want them after all, you know, avoiding another Kenya uniform fiasco)
The current Kenyan real GDP growth is 5.2%, in the current regime our best year was 2007 which was recorded at 6.9%. We are way behind on our goal of 10%, and I hear that investors feel a bit ify when it comes to negative GDP growth. Plus it didn’t help that the world bank rated us at 109 in the ease of doing business index which is a drop from 106 in 2010. Taking a thoughtful pause of reflection, the implications of this figure means a lot, if it’s dropping then it means many Kenyans today are unemployed and many more are sleeping hungry. Sadly, I may not be able to afford my sexy pair of turquoise heels just yet, I mean come on they are like KES 4000; but I’m also happy to announce that not many ladies will get their grabby little hands on them.