. Narc economic recovery wasn't driven by government expenditure into SMEs and the poor but unleashing of funds that were previously being gobbled up by government. A healthy fiscally responsible country budget should be 15% of GDP, currently we are at more than 30%.Thank you Turkana. #BottomUpEconomicsKe pic.twitter.com/M2pcb4iVrg
— David Ndii (@DavidNdii) January 28, 2022
Economic growth mainly driven by government expenditure always ends up with rosy gdp growth but little increase in productivity gains. The most important thing is to make sure there's robust private sector growth, this results into "pesa mfukoni". David ndii wants to reallocate government spending but still maintain the huge budgets. The supply side solution would be to slash government spending and borrowing. This would reduce crowding out of private sector, the biggest economic problem,. Narc economic recovery wasn't driven by government expenditure into SMEs and the poor but unleashing of funds that were previously being gobbled up by government. A healthy fiscally responsible country budget should be 15% of GDP, currently we are at more than 30%.Thank you Turkana. #BottomUpEconomicsKe pic.twitter.com/M2pcb4iVrg
— David Ndii (@DavidNdii) January 28, 2022
But problem is will private sector as much they as they create wealth redistribute the money to the poor bottom up? we are already near south africa in income inequality?Inequality in Kenya is driven mainly by crony capitalism. Crony capitalism is bred by bureaucracy and heavy government involvement in the economy. There's a direct correlation between corruption and inequality. That's why the freer the economy the less inequality.
Secondly how do you bridge the huge infrastructure deficit or gap without spending a lot - public investment - in building roads, dams, etc.
The way I see - development is long term - not impact not immediate - delayed but long term more profitable- economy is short term - people having money on their pockets - like dude who never build a house or get mortgage - but drinks and eats daily - long term he will suffer.
I think at our level of undevelopment - I am not convinced about reducing public investment. Once we have bridged the infrastructure deficit - meaning everyone has clean piped water, electricity, paved roads and such basic infrastructure - we can now reduce public investment - and let private sector grow.
I am okay with gov subsidizing inputs in some revolving fund - but never outputs. I see fuel subsidy now has been bottomless pit.
But problem is will private sector as much they as they create wealth redistribute the money to the poor bottom up? we are already near south africa in income inequality?
Secondly how do you bridge the huge infrastructure deficit or gap without spending a lot - public investment - in building roads, dams, etc.
The way I see - development is long term - not impact not immediate - delayed but long term more profitable- economy is short term - people having money on their pockets - like dude who never build a house or get mortgage - but drinks and eats daily - long term he will suffer.
I think at our level of undevelopment - I am not convinced about reducing public investment. Once we have bridged the infrastructure deficit - meaning everyone has clean piped water, electricity, paved roads and such basic infrastructure - we can now reduce public investment - and let private sector grow.
I am okay with gov subsidizing inputs in some revolving fund - but never outputs. I see fuel subsidy now has been bottomless pit.Economic growth mainly driven by government expenditure always ends up with rosy gdp growth but little increase in productivity gains. The most important thing is to make sure there's robust private sector growth, this results into "pesa mfukoni". David ndii wants to reallocate government spending but still maintain the huge budgets. The supply side solution would be to slash government spending and borrowing. This would reduce crowding out of private sector, the biggest economic problem,. Narc economic recovery wasn't driven by government expenditure into SMEs and the poor but unleashing of funds that were previously being gobbled up by government. A healthy fiscally responsible country budget should be 15% of GDP, currently we are at more than 30%.Thank you Turkana. #BottomUpEconomicsKe pic.twitter.com/M2pcb4iVrg
— David Ndii (@DavidNdii) January 28, 2022
Inequality in Kenya is driven mainly by crony capitalism. Crony capitalism is bred by bureaucracy and heavy government involvement in the economy. There's a direct correlation between corruption and inequality. That's why the freer the economy the less inequality.
The more pressing problem in kenya isn't infrastructure deficit but production deficit. Its almost naive to look at western world as benchmark for the infrastructure needed without comparing production standards in western world also. Fix production and infrastructure will follow but not the other way around(build and they'll come").
Ndii is too micro. He focuses on small stuff not the big picture. HK approach is the best solution. Trim govt spending and deal with cronyism. Cronyism in kenya is usually in middle level management with gok bureaucracy. That why the wanjigis of this world have more leverage than most politicians. They are connected to this core group. According to kenyan leading economists the most corrupt civil servants are about 20k. You deal with this 20k you can shut down cronyism
Lower taxes. Pick projects based on priority and ability to fund them. Civil service reform. A radical reform could lower corruption. The key is be very deliberate on what is being done. Not engage on speculative projects. Fiscal discipline is what we need to wean the economy off the debt trap we are in