Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on July 29, 2021, 01:55:49 AM
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Bottom-up is what Equity Bank did - that has enabled it grow from bank no 62 in Kenya - to the biggest bank in East and Central Africa - with assets more than 10B dollars. It did this by providing banking to the "unbankable".
Bottom-up is what Safaricom did - with Mpesa and the many products focused on the bottom of the pyramid - and Safaricom is now 17B dollars behemoth.
Bottom up by EABL - has enabled the KEG bear to overtake Tusker and any of their beer - by huge volumes it ships. This poor man beer has enabled EABL to invest in 150M dollars factory in Kisumu and support value chain of millet and sorghum farmers - and many such poor man bars.
Bottom of the pyramid model is very clear on the private sector - it targeting the poor at the base of the socio-economic pyramid - and going for SCALE - that way you can make huge profit from very tiny margins.
Now when it comes to public/gov sector - that is where it get a bit fuzzy - but model is the same.
Target the poor - not as 'social safety' net or CSO like we are doing in Top Down Trickle Economy - but as the CORE business - the same way Equity bank - main customers are not the corporates - but the Mama Mboga.
So at the very start - it's a philosophy - and Ruto has already scored big one - by shinning the light on the majority of kenyans - who are poor and in informal sector. You need philosophy like vision 2030 or Moi's Nyayo philosophy of peace,love and unit - to rally the society to make fundamental change or equity Member or Safaricom many iconic campaigns.
The next thing is to transform this philosophy to become government policy. That foremost whenever we do anything - we will think about the majority poor. When we are budgeting the - poor hustlers - at bottom of pyramid will be considered fast. When were are passing the law the majority poor will be considered -for any adverse effect.
The 3rd stage is now strategies and policies to REACH the BOTTOM.
There is no magic bullet here but suffice to say - before we give KQ - 20B cash injection - we should think about giving that money to bottom pyramid of the airline industry.
Before we think about injecting 3-5B to Mumias Sugar Corp - we can probably give the sugar farmers subsidized fertilizers - or even organize them into co-operatives - and inject capital - that they can borrow cheaply and buy inputs, pay school fees and such.
The strategies must avoid those that have failed and those that DO NOT SCALE.
For example Uwezo/Youth/Women fund is a BIG failure. The group based collatorized loan from gov is a failure. People don't repay and the fund remain stymed.
I would go for organizing poor hustlers into cooperatives and gov funding those cooperatives. The cooperative that meets governance criteria and can repay the loans.
So for examples - all hawkers - should become part of cooperatives - and gov can inject money, training, capacity building and name it. Mechanics can do the same. The same way tea and coffee farming is cooperative led - should be replicated in entire agricluture.
The Matatu sectors are already in Saccos - it therefore easy for gov to go in and fund them - so they can buy bigger, better cars - and they can avoid very expensive bank loans.
The other strategy is to decriminalize informal sector - once hustlers are organized - it would be easy for them to agree with gov on how to do business - without police or county chasing them all over town. Remove the bloody Kanjos and Traffic police who are keeping the poor down by collecting bribes - and let the Sacco manage traffic routes and such- let them self-regulate - with police providing supervision. The police can flag private my car people - but commercial vehicles - belonging to saccos - should be left alone. Any violation - the sacco should be punished - fined - so they can do better job with their membership discipline and compliance.
The other strategy - remove all taxes, license fees, barriers to entry for small businesses and hustlers - the sacco can probably pay one license for everyone - as long as you had badge saying you belong to XYX hawker sacco - you should be good to go.
If you cross turnover is less than xyz - you should not pay these taxes - which for big business has little impact - but for people down at bottom is a real barrier to entry. Almost like Equity customer being told to pay 5000 to open an account - or opening an account is free - it make huge difference. Or Safaricom selling simcard - versus giving out for free.
Those will work for those in business or entrepreneurship path.
Those who want employment - gov should spend public money on projects with ability to employ the most people - for example mass social housing, mass road construction that is labour based, mass water connections, mass sewage connections, such kind of infrastructure work that can employ millions.
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This Kiptoo understands Bottom Up
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Bottom-up approach, he says, has very little to do with the government or politicians providing goodies to the public but creating an enabling environment for the small and medium enterprises to thrive.
This includes coming up with policies that decriminalises hawking; reduces the burden of taxation to SMEs; allowing small businesses, especially the millions in the informal sector, access cheap credit from financial institutions.
Some of these policies, Billow Kerrow, former Senator of Mandera County and KANU’s shadow finance minister in the ninth parliament, said while bottom-up approach is ideal, it will take some time before it takes shape.
For it to work, there is need for change in the mind-set of policymakers such as Treasury mandarins who believe that this economy is about the modern sector, the industries, and banks. “Those are the guys whose views determine the government policy to a large extent,” said Mr Kerrow.
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They should keep messaging short and sweat - this will appeal to majority poor - the other shouting economics will lose - Sonko did this and won Nairobi - and Misra in eldoret promised a cow to everyone
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Good video on Bottom Economic Model
Identify 3 elements -
1) Investing in BPI -Basic Public Investment ( Education,Healthcare, SafetyNets, Infrastructure)
2) Valuing all Workers - Min salary, equal pay equal work
3) Fair System - fixing crony capitalism and patronage system - monopolies ect
Investing in all workers (hustlers) put money on people who need the most and who will spend quickly; expanding the economy quickly
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mass affordable housing - will not only create jobs and grow the economy during construction - but ultimatly improve bottom of the pyramid economic fortunes.
Ephraim Njega
2m ·
Renting is the greatest contributor to economic and social inequalities in modern times. Every month over 4.7 million (3.7 million in urban areas) transfer over 20% of their income to a handful of landlords.
Some households spend even more than 30% of their income on rent. If this money was left to the households to spend on other things the impact on the economy would be tremendous. The increase in disposable income would lead to explosive economic growth.
This is why the government must invest in affordable housing. The definition of affordable housing should be that no household should spend more than 15% of their income on rent unless they choose to do so.
This definition is key because unless we clearly know what is affordable housing, we will never achieve it. When you hear a politician talk about affordable housing ask them to define it.
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Mohammed Hersi
6tShpoinfssaored ·
*Bottom Up Economic model is no new invention,* just drop the corruption gown.
Botrom up economic model is not any new invention . The million $$$ question is how you choose to practice it.
*First things first ..corruption kills bottoms up economic model.*
When banks were busy closing branches in late 90s ostensibly to get rid of unprofitable banks in smaller towns , one bank was quietly taking their place and that bank was none other than Equity Bank Kenya .
When mobile telephone companies were licensed in Kenya , Kencel was quick off the starting block and mobile lines were going for Ksh 200,000 and it became a status symbol. Bar waiters and barmen had to provide an extra glass for the phone owner to show the world that he indeed owned a mobile phone . This was real not some urban tales. We had true ninjas then.
When scratch cards were introduced it was in Ksh 1000 denomination because the poor Kenyan was not in the equation . How can mama mboga or a shoe shiner own a mobile phone ?
For banks NARC government decided they wont compete with Wanjiku to borrow from banks and that happened as soon as Kibaki took office in 2003. Banks were now left with Kenyans and Dr Mwangi had already positioned Equity in all the small towns where other bigger banks had fled because a client in muddy farm gumboots or sweaty wakulima trader was not a cool customer.
On the mobile telephony side , Safaricom PLC was hived off that dinosaur KPTC hence their slow entry but again how many recall that when we accuse Safaricom of being a dominant player. Safaricom invented Mpesa and who worked hard 24/7 to stop them ? Same banks who quit the so called small towns but glad that then acting Finance Minister John Michuki and CBK Governor Ndungu waved play on.
For banks many had to struggle to try and get their old premises back and it was a common phenomenon to see banks setting up tents at bus stops pleading to the same small man they left high and dry to come back and reopen a bank account.
On the other hand Safaricom decided to offer scratch card as low as Ksh 20 then known as blue and finally okoa jahazi was born. Michael Joseph and late Bob Collymore truly practiced what it means trading with the folks at the bottom of the pyramid and by empowering them that is nothing but bottoms up economy.
At goverment level bottom up economy is already in place when you allocate Ksh140 million per MP per constituency per year Ksh 700Million in five years and Ksh 1.4B in 10 years . Folks Ksh 140M that is a cool $1.3million a year which is alot of money. I have seen what my MP. Official Jicho Pevu with Mohammed Ali Mohammed Ali has been able to achieve in under 3 years .
Each woman rep is also getting on average Ksh 7 Milion per constituency so a county like Nbi the women rep gets more than an MP who runs CDF while Governors some handle Ksh11B + a year and then of course national goverment.
CK Prahald in his book *"The fortune at the bottom of the pyramid"* delves deep on how you can trade with the citizens at the bottom of the pyramid and in the process eradicate poverty and even make profits.
Succesful Safaricom has not been made successful by post paid subscribers but by prepaid subscribers. Last stats was that 85% of their subscribers were indeed pre paid so when Bob Collymore was spending more time in the slums and working with artists he knew what he was doing and in the process empowering the man and woman at the bottom of the pyramid.
When Safaricom decided to pick the lady lamenting about the floods in western Kenya in one of their ads they knew she was the face of the bottom of the pyramid who in turn help push the economy from the bottom. They stood with her not through handout but turning her into one of their brand ambassadors. While the rest of Kenyans found the plight of the lady hilarious and funny, Safaricom were seeing their customer in distress and in the process she ended up on billboards and she was a guest in our homes on our TV sets just before prime time news . Give it to Safaricom they know how to connect with the man or woman at the bottom of the pyramid.
*Bottom up model in private sector is very much alive and kicking,* even the consumer goods packed in smaller quantities so called kadogo economy is bottom up model and trading with the folks at the bottom of the pyramid.
The bad news is that bottom up in public sector wont work as long as we dont slay the corruption dragon and our wasteful habits. It is one thing to shout bottom up economic model but you must chose to walk Equity or Safaricom path to make it happen.
*As a start please start with your local MP* shouting himself or herself hoarse "Bottom up" on how they have utilised the half a billion shillings in the last 4 years or even Ksh 1 billion for those who are serving a 2nd term.
To Equity Bank Kenya Safaricom PLC and My MP Mohammed Ali I salute you for making it happen right at the bottom of the pyramid . Our political class must study Equity and Safaricom model but as they do that *they must drop the corruption gown at the door.*
*Corruption is the enemy of Bottom Up economy and any other economic model for that matter*
Well as always I choose to remain an optimist.
*Mohammed Hersi*
*Mombasa*
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For those stuck in POLITICS of ethnicity, positions, power and constitutional changes, they MUST have a debate on the ECONOMY especially the BOTTOM UP model that is focused on the jobless, struggling hustler enterprises & those who can't put food on the table that is posing a major challenge - UNDERSTANDABLY.
We have the option of making peace with the mediocrity of leaders-centred, position/power sharing politics and the failed trickle down economics OR up our game to the PEOPLE-CENTRED and BOTTOM UP model that DELIBERATELY focuses on labour intensive infrastructure/manufacture investments.
BOTTOM UP is focused on DELIBERATELY creating Jobs, LIBERATING hustler enterprises from shylock-credit exploitation & unfair regulation and EMPOWERING our resource-poor farmers/herders to produce so as to FREE them from the slavery and indignity of relief food aid.
Difficult as it is, the ECONOMY conversation is a MUST have if we have to salvage our PRESENT and liberate our FUTURE. Welcome to the new bottom up conversation that will burry tribalism, patronage, cronyism and corruption. Truly the conversation HAS changed for good.
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Bangladesh has grown from 100B to 300B economy in 10yrs - growing at 7 percent - thanks to Textile and Remittance.
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https://www.standardmedia.co.ke/opinion/article/2001419857/opinion-bottom-up-economics-is-the-future-but-the-bureaucrats-gaining-from-cronyism-oppose#
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Bottoms up is a useless phrase. Why don't he just come up with an economic plan instead of slogans. Mara hustler, mara bottoms up etc. BTW, what happened to wheelbarrow revolution.
https://www.standardmedia.co.ke/opinion/article/2001419857/opinion-bottom-up-economics-is-the-future-but-the-bureaucrats-gaining-from-cronyism-oppose#
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It a sure vote winner. It what gave Sonko more votes than anybody in Nairobi. Anybody opposing is an idiot. In a country where the majority are poor and jobless. I see Raila talking about handouts. These things work - harambees and the likes.In fact one reason Riala has not manage to nick it - despite coming close to it - is such small stuff.
Call it whatever - but message is home - next gov will prioritize the poor, the weak and the wretched. Cannot beat such messaging esp while presenting the three sons of dynasties against a chicken seller :)
This is another Sonko BLOW OUT. Or eldoret freshly minted Indian Mishra winning by huge margins by promising every poor family a cow :) :) :)
Bottoms up is a useless phrase. Why don't he just come up with an economic plan instead of slogans. Mara hustler, mara bottoms up etc. BTW, what happened to wheelbarrow revolution.
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There's a false narrative being peddled around. Bottom up vs trickle down economics. In the real sense its keysian ( tax, borrow and spend) by government vs Supply side economics, i.e cutting spending, cut taxes, reduce interest rates, deregulate and unleash the private sector. The only difference between jubilee economics and hustler economics its where money is spent but its the same economic philosophy. Jubilee spending was in mega infrastructures, crowded out the private sector the hustler economics proposes to spend on the bottom, but its still spending. The question that'll come up as with every keysian model is, how to finance spending especially when the country is in debt crisis.
Private sector credit growth has reduced to a trickle , the bottom up model being pushed proposes to step in, to provide credit and finance. Basically instead of market deciding who to give credit or finance, the government would do that. This would be crony capitalism from the bottom.
Supply side economics works, for example check ERP that david ndii co wrote in the first narc administration. Or the big bang economic reforms in the 90s under Mudavadi.
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Macro-economics - cutting spending, cut taxes, reduce interest rates, deregulate and unleash the private sector
I think interest rates are on the floor (base rate is 7 percent)- except for hustlers who depend on duka credit, fuliza and digital loans. This is where development banks by gov - like KCB or kenya dev bank - were suppose to be - Ethiopia state banks or China state banks. These are required at the bottom - but more on cooperative bank model.
Cutting taxes - when we have huge debt problem - I don't see how that will work in short term.
But cutting spending, deregulation, and unleashing the private sector - is bottom-up.
Cutting spending - we can only cut development spending - and maybe reduce recurrent expenditure - and deal with corruption?
Deregulation - agreed.
Unleashing private sector - agreed? But how.
For me gov should really privatize more - all the 200 plus state corporations - and shares that gov owns in Safaricom, KCB, and rest - should be put on firesale.
Those 200 state corportation will create big private sectors.
The money from the sale should be put in Infrastructure Fund - like Ghana has one. Such infrastructure fund - will be able to finance roads - either directly or through borrowings or working with Private Partnership.
But most important infrastructure and housing and energy should focus on Public Private Partnernship.
The energy sector for example saw 10B dollars of investment from PPPs.
We are starting the same on roads - and should cover entire transport sector
We need to do the same on housing.
Privatize all these KPAs, Kenya Pipelines - name them - and you will reduce public debt exposure - and will grow those institutions and the economy.
Privatize Mombasa port, Lamu port, name them, JKIAs, Wilson, name them.
Those underwater like Mumias, KQ - sell them for one dollar/kshs - as long as buyer takes on their debt - and clean up public debt.
Let gov remain as regulator - provide security and oversight - and it will be able to spend less, tax less and private economy including SMES will be unleashed.
Where the private sector will not find it profitable - gov will provide part of funding through infrastructure fund - for example if building an aiport in Wajir is not profitable - and there is strategic need - gov can agree with some somali business men to go 50-50 on such a venture. Treasury should not be taking debts and guarantees all over the map.
There's a false narrative being peddled around. Bottom up vs trickle down economics. In the real sense its keysian ( tax, borrow and spend) by government vs Supply side economics, i.e cutting spending, cut taxes, reduce interest rates, deregulate and unleash the private sector. The only difference between jubilee economics and hustler economics its where money is spent but its the same economic philosophy. Jubilee spending was in mega infrastructures, crowded out the private sector the hustler economics proposes to spend on the bottom, but its still spending. The question that'll come up as with every keysian model is, how to finance spending especially when the country is in debt crisis.
Private sector credit growth has reduced to a trickle , the bottom up model being pushed proposes to step in, to provide credit and finance. Basically instead of market deciding who to give credit or finance, the government would do that. This would be crony capitalism from the bottom.
Supply side economics works, for example check ERP that david ndii co wrote in the first narc administration. Or the big bang economic reforms in the 90s under Mudavadi.
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The best bottom up - these Kajiado women use to hawk milk - but with a little organization - they have turned around their fortunes. Gov need to move in and help such cooperatives - improve their breeds, improve the feeds and improve their value chains - not sell to brookside - but process their milk.
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Lesson to be learnt from SACCO failures
https://www.standardmedia.co.ke/national/article/2001420410/how-ethiopia-inspired-the-sacco-movement-in-kenya
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Lesson from Nigeria agriclutural revolution under Buhari
Funding primary producers - farmers - through cooperatives - of 5-10 - and money is strictly restricted for withdrawal for farming
Anchor Borrowers Programme in Nigeria has financed 2.9M farmers producing 17 crops - farming 3m hectares.
Nigeria also finances millers....who then pay farmers..
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Zambia
Hakainde Hichilema
5h ·
We proposed the creation of the Ministry of Small & Medium Enterprise Development to facilitate the creation and growth of your small and medium enterprises (SMEs).
SME development will certainly contribute to job creation, especially among our youth and women and towards our productivity. We committed ourselves to empowering our citizens in all sectors so they can favourably compete in economic activities across Zambia.
Our economy needs strong SMEs and we urge you to seize the opportunities that the new Ministry will create.
Hakainde Hichilema
President of the Republic of Zambia
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Reading btw the lines of Ruto-Ndii
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WSR
Financing and decriminalising enterprises will be the engine driving the Bottom-Up Economic Model, ultimately spurring our country’s growth.