Business and theEconomy : A Worm'sEye-view
To survive in any business, one
needs respect. To get that
respect, one needs power, and
to get power, one needs money.
Only then will one earn respect.
It is common-place knowledge that a sound economy and
sustainable energy sources are
the fundamental pillars for any
company, blue-chip or otherwise.
However, in the past few
months, economies world-over have witnessed and borne the
effects of the unprecedented
credit crunch and the rise in the
cost of running companies. The
desperate times called for
urgent measures and in turn, companies slashed their work
forces in a clearly desperate
move. Just what is causing the
unexpected rise in the shortage
of credit and the rise in the
cost of fuel (energy)? And what are the effects of such to a
developing country like Kenya? Black gold and the black hole:
The unexpected rise in the
consumption of fossil fuels has
led to the creation of an
economic black hole that has
sucked all the players in the industry. From telephony
companies to medical centres
and transport systems, all the
important movers and shakers
of the country's economy
depend on petroleum, either as the main source of fuel or,
worse still, as the back-up
alternative. This has led to the
mushrooming of cartels that
create artificial shortages, by
stealing and hoarding, in order to drive the cost of fuel
through the roof. The proposal
by the Energy Regulatory
Commission to develop and adapt
a formula that would be used to
calculate the cost of fuel, according to the locale, is a
short-term measure that would
help solve the uncontrolled fuel
prices in the country. Alternative
sources of fuel are expensive to
process and manufacture and as such, measures reducing the
cost of production of such,
should be implemented. Nuclear
energy, bio-fuels and geo-
thermal energy sources are yet
to be exploited here in Kenya. The domino effect of high fuel
costs reverberates in all the
related and other sectors of
the economy. The cost of fuel
affects the cost of transport
and food, which are all basic needs in the human life. Giving unto Caesar:
The recent showdown in the
political scene has been shameful
and archaic really. Since the
medieval times, tax has never
been a debatable issue! Tax must be paid by every man
according to his means. The
average tax-payer has borne
the brunt of the unprecedented
increase in the taxation levels in
the country. With the prices of fuel and food high, and salaries
the same, life is becoming
unnecessarily expensive. In any
society where there is a
shortage of Actually, Kenyans
are among the highest taxed in the world and still, we rank
highly in the corruption index!
This simply means that tax and
the monies collected by the
central government and local
authorities are used in unbudgeted expenditure and by
individuals. Knowing that the
economic and financial muscle of
Kenya was roughly equal to that
of South-Korea and Singapore in
the 60s is a let-down. Taxes and other emoluments levied by
the government should be put
into better use and accounted
for every so often. Small and Middle Enterprises:
There has been a commendable
rise in entrepreneurship levels in
the country over the past few
years. The creation of the youth
enterprise fund has led to the setting up of many middle and
small businesses, especially in a
bid to come out of the vagaries
of penury. However comparing a
population of 10 million work-
worthy youths to a billion shillings is all but serious. It is a
subtle move by the government
to create the fund,
nevertheless, more money needs
to be directed towards the
venture if the youth in the country are to unchain
themselves from the dungeons
of idling and unemployment. The
recent exhibition of both hard
and soft innovations by the
engineering students at the Engineering Students' Exhibition
was a clear-cut example into
the paradigm shift that is
already taking place in the
country. Ranging from providing
online-advertising services to owning fast food joints, the
youth are clearly taking over.
More and more young people
are aspiring towards self-
independence and financial
freedom by being creative and "thinking outside the box." Transcom and Infrastructure:
The development in the
Information and Communication
sector of the economy has been
bullish. With the fourth mobile
telephone company in the market already, the cost of
communication is coming down,
and fast. The cost of obtaining
and sending data has been
greatly reduced. With Kenya fast
embracing modern technological advancements, the results are
superb. VC (video conferencing)
and VOIP (voice over the
internet protocol) are just but
the likes of such uses of the
internet. More companies are developing websites to advertise
themselves to both loyal
customers and potential clients,
thus increasing their ever-
important clientele base. Money
transfer has become as easy as can be. From the convenience of
the mobile-phone, the quick
transfer of small amounts of
money has become a big
business in the country. Despite
the rapid advancements ironically, the ubiquity of
computers is yet to reach the
deeps of the Kenyan rural
population. Still, the fibre optic
cable being laid is a set-back in
the bid to hasten the rate of data transfer and receipt. While the ICT sector is thriving,
its transport sector is a vague
shadow of its former self. Pot-
holes are not strange anymore,
car-jacking is becoming mundane
and unnecessary road-blocks hinder the time taken for both
goods and service-providers to
reach their destinations. Despite
having a relatively wide-spread
road network, the state of the
roads is pathetic. Travelling a meagre 350Km from Nairobi to
Kisumu takes about 8 hours -a
journey which on average would
take 3 to 4 hours! These impact
negatively on the businesses
that are directly linked with, or dependent on, time taken to
transport goods and services. As much as there has been a
praiseworthy development in the
economy of the country, there
ought to be drastic measures to
curb the mentioned, and other,
problems in order to expedite the process of achieving the
Millennium Development Goals
(MDGs).
needs respect. To get that
respect, one needs power, and
to get power, one needs money.
Only then will one earn respect.
It is common-place knowledge that a sound economy and
sustainable energy sources are
the fundamental pillars for any
company, blue-chip or otherwise.
However, in the past few
months, economies world-over have witnessed and borne the
effects of the unprecedented
credit crunch and the rise in the
cost of running companies. The
desperate times called for
urgent measures and in turn, companies slashed their work
forces in a clearly desperate
move. Just what is causing the
unexpected rise in the shortage
of credit and the rise in the
cost of fuel (energy)? And what are the effects of such to a
developing country like Kenya? Black gold and the black hole:
The unexpected rise in the
consumption of fossil fuels has
led to the creation of an
economic black hole that has
sucked all the players in the industry. From telephony
companies to medical centres
and transport systems, all the
important movers and shakers
of the country's economy
depend on petroleum, either as the main source of fuel or,
worse still, as the back-up
alternative. This has led to the
mushrooming of cartels that
create artificial shortages, by
stealing and hoarding, in order to drive the cost of fuel
through the roof. The proposal
by the Energy Regulatory
Commission to develop and adapt
a formula that would be used to
calculate the cost of fuel, according to the locale, is a
short-term measure that would
help solve the uncontrolled fuel
prices in the country. Alternative
sources of fuel are expensive to
process and manufacture and as such, measures reducing the
cost of production of such,
should be implemented. Nuclear
energy, bio-fuels and geo-
thermal energy sources are yet
to be exploited here in Kenya. The domino effect of high fuel
costs reverberates in all the
related and other sectors of
the economy. The cost of fuel
affects the cost of transport
and food, which are all basic needs in the human life. Giving unto Caesar:
The recent showdown in the
political scene has been shameful
and archaic really. Since the
medieval times, tax has never
been a debatable issue! Tax must be paid by every man
according to his means. The
average tax-payer has borne
the brunt of the unprecedented
increase in the taxation levels in
the country. With the prices of fuel and food high, and salaries
the same, life is becoming
unnecessarily expensive. In any
society where there is a
shortage of Actually, Kenyans
are among the highest taxed in the world and still, we rank
highly in the corruption index!
This simply means that tax and
the monies collected by the
central government and local
authorities are used in unbudgeted expenditure and by
individuals. Knowing that the
economic and financial muscle of
Kenya was roughly equal to that
of South-Korea and Singapore in
the 60s is a let-down. Taxes and other emoluments levied by
the government should be put
into better use and accounted
for every so often. Small and Middle Enterprises:
There has been a commendable
rise in entrepreneurship levels in
the country over the past few
years. The creation of the youth
enterprise fund has led to the setting up of many middle and
small businesses, especially in a
bid to come out of the vagaries
of penury. However comparing a
population of 10 million work-
worthy youths to a billion shillings is all but serious. It is a
subtle move by the government
to create the fund,
nevertheless, more money needs
to be directed towards the
venture if the youth in the country are to unchain
themselves from the dungeons
of idling and unemployment. The
recent exhibition of both hard
and soft innovations by the
engineering students at the Engineering Students' Exhibition
was a clear-cut example into
the paradigm shift that is
already taking place in the
country. Ranging from providing
online-advertising services to owning fast food joints, the
youth are clearly taking over.
More and more young people
are aspiring towards self-
independence and financial
freedom by being creative and "thinking outside the box." Transcom and Infrastructure:
The development in the
Information and Communication
sector of the economy has been
bullish. With the fourth mobile
telephone company in the market already, the cost of
communication is coming down,
and fast. The cost of obtaining
and sending data has been
greatly reduced. With Kenya fast
embracing modern technological advancements, the results are
superb. VC (video conferencing)
and VOIP (voice over the
internet protocol) are just but
the likes of such uses of the
internet. More companies are developing websites to advertise
themselves to both loyal
customers and potential clients,
thus increasing their ever-
important clientele base. Money
transfer has become as easy as can be. From the convenience of
the mobile-phone, the quick
transfer of small amounts of
money has become a big
business in the country. Despite
the rapid advancements ironically, the ubiquity of
computers is yet to reach the
deeps of the Kenyan rural
population. Still, the fibre optic
cable being laid is a set-back in
the bid to hasten the rate of data transfer and receipt. While the ICT sector is thriving,
its transport sector is a vague
shadow of its former self. Pot-
holes are not strange anymore,
car-jacking is becoming mundane
and unnecessary road-blocks hinder the time taken for both
goods and service-providers to
reach their destinations. Despite
having a relatively wide-spread
road network, the state of the
roads is pathetic. Travelling a meagre 350Km from Nairobi to
Kisumu takes about 8 hours -a
journey which on average would
take 3 to 4 hours! These impact
negatively on the businesses
that are directly linked with, or dependent on, time taken to
transport goods and services. As much as there has been a
praiseworthy development in the
economy of the country, there
ought to be drastic measures to
curb the mentioned, and other,
problems in order to expedite the process of achieving the
Millennium Development Goals
(MDGs).
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