Taxing Rich Kenyans More Will not Solve the Underlying Problems for the Poor

I welcome Prime Minister's  argument of  the possibility of raising taxes on the rich in order to bridge the budget deficit that will be created by the recent intervention measures announced to cushion Kenyans from the high cost of living. However I welcome this with a lot of reservations and misgivings. Its appears to me like a populist argument and myopic for that matter and hold no water. This is because of a number of reasons.The percentage of the rich in Kenya is very small and no matter how much you tax them you do not need a space scientist to tell you that the impacts to our economy is not only negligible but minute.Its also apparent that the rich class in Kenya is largely constituted by the political elite who are expected to pass the necessary statutes so that this can be implemented.This is like expecting a judge to give a fair trial for his/her own case.The other thing is how do you identify a rich person and what variables are you going to use?

The Premier  should instead have focused on long term measures to lower the cost of living and also measures that will ensure that the government does not lose a large chunk of its revenue.This should have been left to the technocrats of the responsible ministries to come up with the best solutions.Mr Odinga may have meant well for this country but he did not do his home work well.His first question should have been:Where did the rain start beating us?What measures should be taken to cushion Kenyans and at the same measures that does not affect the government source of revenue.

Further no details of how such a measure would be enforced including which wealthy people would be targeted and what percentage they would have to pay were not disclosed, this can only mean one thing,its just a thought and not something the government  intend to implement.By saying that the Treasury had been tasked with that duty and was expected to report back to the executive with proposals of how it could be implemented.Mr Odinga is just admitting that it might not be possible.

One also should be cognizant of the fact that the news will not  be received well by the rich, many of whom complain that they are already heavily taxed. A similar proposal has been floated in the  United States to tax those who make above $250,000 per year,that has been met with a lot of resistant with those targeted arguing that their income fluctuates and they should therefore not be subjected to tax raises.The government's  raft of measures it has  announced including waiving taxes and duties on fuel products and imported grains, are expected to result in a shortfall in revenue targets and thus its should look for long terms and viable measures that will help them recover revenue targets.

The government should think of some other alternatives although with a lot of keenness and sobriety.Such alternatives, include borrowing from the local market.However this is not an attractive  road  to the Treasury and the Central Bank of Kenya, because it would mean pressuring the already volatile interest rates and inflationary pressures. The government also has a choice to borrow from development partners, a move that would further raise Kenya's debts, which is currently at over Sh1.3 trillion.Rationalizing the budgets of  ministries with a view of reducing wastage and corruption and at the same time ensure that they are able to meet their targets and financial obligations.

Although this will be a tough call for the Treasury as the government should not lose sight  of its future growth targets and as such its should not defer its development projects.It should strive to safeguard the country capacity for future growth and even the capacity to allow adjustment process.It should be noted however that the measures announced by the government are meant to contain the rising inflation and reduce the burden on Kenyans, there are high chances of  a lagged effect on the economy. Financial analyst have started to cast doubt on the GDP growth rate projections for 2011 they have proposed to about 4.5 percent.The optimism is still there that with time, the economy, which has been very resilient before, will bounce back.

Its important that the measure taken are long term and are carefully thought.

Repositioning for Financial Indipendence

It's most people life held desire to be rich or simply to achieve financial freedom.One thing is obvious that its not easy to get this overnight.Its requires proper planning and the right counsel. Many things have been said and written on how to attain financial independence, but there are virtues that remain constant.We shall examine the rules of achieving financial independence,They include:

a. Seeking knowledge/wisdom:- This is the first step.This entails having general knowledge on the basics and fundamentals of business.This is important as it gives you the capability to be able to chose which road to take.Please note that this does not mean spending time reading all business books and the like.

b. Discipline and Persistence:- An old adage goes like,its not the force of the river that breaks the rock,but the persistence of the river.What does that mean?getting rich involves taking disciplined steps over an elongated time frame.You are unlikely to achieve financial independence if you are not focused and disciplined.

c. Strategy,time and patience:- You cannot achieve financial freedom if you have no strategy.its like expecting to win a fight without a strategy.Your strategy must be unique to suit what you are focused to achieve. Time is the most valuable variable in any financial undertaking.Achieving financial freedom cannot be done overnight.its takes time.and that why patience is key.Its like the compound interest that one earns from a saving.its requires time and patience to achieve maximum benefits.

d. Offsetting debts:- Debts are inevitable,but if you aspire to achieve financial freedom you must do away with your debts.You must know where the debts are cropping from and address it even if it means changing ones lifestyle.This is a major factor to achieve financial Independence.The two are opposing and thus must be addressed.

f. Target/Goal:- What your target?You must be very clear of your target. You must be resolute  and candid to yourself in terms of where you are and where you want to be in near and distant future.This means you keep on reviewing your goals or targets as time and circumstances dictate.

Nothing is easy in life.Achieving the financial freedom requires effort.One thing that is clear is that one must be clear where he/she is and want to be.

High Cost of Living Should be Addressed Urgently!

The cost of living in Kenya has hit the roof.Already the inflation is on an upward scale due to this.This can only mean one thing that the government intervention is needed urgently.There are a number of reason that have contributed to a high cost of living.The major contributor being high cost of crude oil.The cost of production is very high in Kenya.This is largely due to the high cost of energy.Kenya still rely on thermal energy which is expensive.The cost of crude oil is going up each day.The conflict in middle East and North Africa is partly to blame. The trickle down effect of this high cost of living is being felt across the divide.Almost all basic household commodities have increased their prices due to high cost of production.According to Central Bank of Kenya, petroleum is one of Kenya’s  largest import item accounting for a fifth or 20 per cent of the total import bill. The country spent Sh181.2 billion (US$2.2 billion) to import oil in the year ending February 2010

This  much money flowing into the industry, Government and  oil dealers line up for a stake of. Treasury directly takes around 30% of the cost of fuel that Kenyans pay for. A buyer pays for a litre of petrol at the pump station, and more than Sh30 goes to the Government as taxes,the bulk of it as Excise Duty that stands at a fixed Sh19.51.Sh9 as road maintenance levy and 40 cents in Petroleum Development Levy.A further remission fee of 45 cents per litre is paid to the Government and a 2.25 per cent paid to get an import declaration license.A litre of regular petrol costs about Sh69 to buy and ship to Kenya. Marketers use Sh3 to transport the litre of petrol to inland Kenya, a figure that varies depending on how further inland their retail outlets are. All add up to about Sh103, leaving oil marketing companies with a margin of Sh9 for a litre of petrol retailing in Nairobi at Sh111.Oil marketers have complained the Sh9 per litre they make is insignificant compared to their overhead costs.Leading oil companies like Total Kenya and Kenol Kobil that have a service station network of over 170 and 150 respectively, have been recording impressive profitability.

Recently Total Kenya announced Sh733 million profit before tax while KenolKobil sold petroleum products worth Sh101 billion last year leading to a 40 per cent growth in net profits to Sh2.7 billion.State parastatals like Kenya Pipeline Company (KPC) and Kenya Petroleum Refinery Limited (KPRL) also rake in billions from the oil industry.KPC makes a revenue of Sh3 billion per year while KPRL makes Sh3 billion annually. KPC is largely a monopoly in the storage and transportation infrastructure of oil but high levels of inefficiencies have forced oil companies to seek alternatives like road transport to deliver products inland, which in turn pushes up the prices.

Not unless this is addressed, the cost of living will continue to go up.However its important to note that oil prices have a significant effect on the cost of living.Other factors are inefficiency on government departments especially during procuring  and corruption in both private and public sector.All these need to be addressed to ease the burden of high cost of living. We need to ask ourselves where the rain started beating us and address these problem one by one.Cartels in the oil industry need to be done away with,reducing of taxes or scrapping it should be looked into.Encouraging farming methods that are not expensive and sourcing of inputs from less expensive markets. Raising the minimum wage before addressing the underlying issues contributing to a high cost of living is simply myopic and its like putting the cart in front of the horse.This will only exacerbate the problem by increasing the cost of production and hence this will be passed to the end user.Its will also result in  people losing their jobs as most companies cannot afford a high wage bill.The government may also freeze recruitment if the wage bill increases.What COTU should be proposing is how to lower cost of living.It has been largely argued that the cost of labour in Kenya is very high.Countries like India and Brazil are doing better than us.However increasing the minimum wages should be seen as a long term goal/measure that will be addressed after addressing the root cause of high cost of living,but we need to address the short term goals first.Individually we can help ourselves by buying what we need and avoiding to buy that which we do not need.Its important also to budget ourselves.

We need to mobilize ourselves and realize that change cannot always be brought to us,we must initiate change ourselves from our individual capacity and that the only way we will move on as a country.

NCIC Report on Bias Appointment in the Civil Service is both Myopic and Incomplete.

The NCIC released a report showing how there is lack of representation of some tribes in the public service.The report made very glaring findings of how some tribes have dominated public appointments.Even though the findings provide a glimpse on the appointment in the public service,its fails to make some important considerations.

The report assumes that everybody from every other tribe would want to work in the public service.This is not necessarily true.Some people based on certain variables would want to work elsewhere.The report is also simplistic in its assumptions that all tribes started at the same level after independence.Historians and experts a like will tell you that this is not true and that the colonialists favoured some communities against the others.This then means that some tribes started and an advantaged platform.

The report tend to assert  and argue that the Kikuyu's and Kalenjin dominance is as results of political patronage from the fact that this tribes have enjoyed presidency.However the report does not explain why the other tribes such Luhya,Luo and Kamba dominate  the some sectors of the pubic service,yet they are largely represented.

Its important that the findings  should have tried to explain  why its hard to find experts from certain regions in this country,Why for example there lack experts from certain regions.Its sometime becomes hard to get teachers from certain regions or nurses for example.The report also failed to identify what other minority communities interest  themselves in.The Asian for example dominate in certain businesses such as banking sector.The Arabs dominate the the shipping sector.To argue that these communities have been discriminated against in the public service appointment is simplistic and incomplete.The NCIC should have also tried to identify the reasons of this skewness in the public sector. What they should have advocated for is redistribution. and affirmative action,where minority communities are given special considerations.The report also fails miserable as it does not recognize the gains made toward this endeavour.Although there has been positive development in terms of representation of all tribes in the public services the NCIC report chose to ignore this.


The report cannot therefore be relied to make any important recommendations.Its both myopic and incomplete,Its lacks the holistic approach of any top notch report.

I Weep for My Beloved Country Kenya!

Over the last few days I have followed the happenings in our country in dismay and shock and I can say without any fear of contradiction that I fear that if we continue with this trend,we will fail miserably as a country. Its pans my heart in realizing that we learned no lesson in what happened in 2007/2008.If you thought we were divided as a country in the run up to 2007 elections then you are wrong.Our country is again at the brink and we are actually divided as a nation more. If we are not careful then we may end up with a worst situation than what we had back on 2007/2008.I am not a pessimist but I am a keen observer of the happenings around me. Where are we going wrong?one may ask.

Please allow me to explain,the social media today has become one of the most powerful tool in information sharing. Indeed experts are arguing that if social media is not carefully utilized it may be the cause friction in many countries.The extent to which people are spreading hate speech and propaganda through the social media is a recipe for disaster. People are blatantly using egregious and flagrant words and are spreading graphics that are meant to attack individual character.To be more specific,the issue of the so called "Ocampo Six" has degenerated to a contest of who can use the most gross, outrageous, notorious and derogatory words in the social media.Its not beyond any ones ken that this kind of intolerance,incapacity or indisposition  is not good for this country.People make the issue at hand  personal and rather than sticking to the issue at hand some have resulted in attacking other tribes and exposing their myopic view of the world. its clear that tension is rising and anger is building and if this trend is not checked we are then cheating ourselves while talking about reconciliation. Please note that I am not saying people should not make use of the social media,on the contrary information is power and thus the social media is playing and integral part in information sharing.What we should abhor and discern is misuse of the same as a tool to create friction among people.

Our media also has not played its role and has failed .They seem to have forgotten what it means to be called the fourth estate.I have stated several times in this forum and others that our learned  men and women of the fourth estate have knocked themselves off the pedestal. They concentrate too much on what is not helpful to this country.The reason why they have focused almost all their energy to the proceedings at the ICC still baffles me. Indeed I see no reason why they should not commit the same energy and space in focusing on the MAU MAU case going on in the High Court in London.So many things need key attention such as the constitution implementation,high fuel cost,the issue of IDPs among others.Its important that our media highlight the problems afflicting the common man and woman in every part of this country. The myriad problems Kenyans are facing should be at the centre play of all media houses.

The issue of the ICC has divided this country even further.Even though the intentions of the ICC and Kofi Annan could have been honest, I do not think and I stand to be corrected that the happenings at the ICC will unite this country or will it help in rooting out impunity.Impunity can only be won against when we decide as a country and we are genuine.Our politicians have already made it worse by exposing their shallow views on the issue.They have taken the ICC issue for political gains.Indeed politics have become no longer issue based but rather politics based on brinkmanship and grandstanding.This is not good for us as a country.I will also apportion blame to the ICC prosecutor, Mr.Ocampo.The way he conducted his work leave a lot to be desired.His love for the media attention and his occasional outburst and chest thumping has been a tragedy of gigantic proportion. This has made it look like he is working for some forces behind.Even if this is unlikely to be true,his erratic behaviour communicate otherwise. Its has always been my argument that Kenya should seek peace first then justice.Not forgetting the victims of the 2007/2008 post election violence who I sympathise and empathise with each day,but I think its time we carefully thought what we are doing as country.Indeed we should learn lessons from South Africa and Ireland.There is no way we can say we are seeking peace and justice after prosecuting the six only;what about the people who actually killed and committed other horrendous crimes who continue to walk around freely.Is this not impunity?Truth,Justice and Reconciliation without any degree of equivocation will offer the best way forward for this country.

Our politicians should also stop politicizing the ICC issue.They should allow the process to take it course as they invited the predicament on themselves.They had a chance to establish a local mechanism but they thought they were wiser. I believe the reason why most Kenyans want ICC is not because they have no faith in Kenya courts, but to tell politicians that we as Kenyans are wise and you cannot use us as pawns every time you want.Kenyan witnessed the whole issue as it unfolded in parliament.This is what I call ideological terrorism which our politicians have perfected.They use this on the masses when they are cornered in order to win people support.

Its apparent that we need to go  back to the drawing board as a nation.We cannot continue this way.We must forge as a united force and as one country.We must not allow our country to be wasted again.As a people we must not be hostile or intolerant to each other.We must watch what we say and must be ready to be held responsible for what we do and say.I hope and pray that we shall see the need to change our ways as country and I am conscious of the fact that it start with me!

Kenya Media Focus too Much on the Wrong Priorities

This will not be the first time I will be saying that we need an overhaul in our media sector.Our media has blatantly failed to raise beyond myopic journalism.They commit acres of space and time by focusing on political shenanigans rather than developmental issues.Indeed our learned men and women of the fourth estate have knocked themselves off the pedestal and no longer know what constitute a newsworthy item.

Though the Kenya cases at The Hague are unprecedented in our national experience, the media on pure hype surrounding the first appearance of the so-called "Ocampo Six" before the International Criminal Court (ICC) are baffling, to say the least.

I have always opposed and condemned  journalism that is three parts; minute,intended for no good(Malicious) and sensational. There could never be a worse manifestation of this type of journalism than the way our mass media have reported The Hague melodrama.Days before the Six set off for The Hague, the Daily Nation ran a front-page story that included a night club and restaurant guide to the city the Dutch call Den Haag, all complete with a Red Light (legalised prostitution) district guide!

Did this media mean to suggest that our top leaders are as depraved and frivolous as to be actually decadent? How did the consideration of expensive restaurants, night-clubbing and paid-for sex at all arise in the context of the preliminaries of an international crimes-against-humanity trial?That same week, Alex Chamwada of Citizen TV went around the streets of Den Haag, interviewing the poor inhabitants of the city on the subject of the Kenya Six. Many of his interlocutors appeared to be unaware even of the existence or purpose of the ICC in their own city, much less of the Kenyan accused! What is this gramophone treatment of the Kenya cases in aid of? Why amplify the matter before Dutch ignoramuses who don't care a whit what Kenyans have done or not done?

I single out the Nation Media Group and Citizen TV because they used to set very high standards indeed for extremely sensitive court proceedings. It was the selfsame Daily Nation which, way back in 1969-70, gave newspaper readers their first truly professional journalism covering a major court case.

As for Citizen TV, they were the channel back in 2003-04 which brought us the Goldenberg hearings under the judicial commission of inquiry chaired by Justice Samuel Bosire in full and unexpurgated on a daily basis after prime-time. Hundreds of thousands of Kenyans stayed up till late watching the proceedings. Today, Citizen, a channel that had barely any advertising in 2003-4, is the king of TV ads in the electronic media segment.

In both 1969-70 and 2003-4, the coverage of truly sensational cases was done in such a professional and creative manner that, negative as the deeds then being prosecuted were, there were no overtly negative impacts on any other aspects of Kenya's national life - not the economy, even though Goldenberg concerns terrible crimes against the economy; not tourism; and not Kenya's image or standing in the comity of nations.

The Hague cases are potentially the most politically polarizing and divisive litigation concerning Kenyans and Kenya in our generation. How they are reported and analyzed in the media will impact on our image, not only locally, but also internationally.

On the day William Ruto arrived in The Hague accompanied by some 24 MPs, the lead item on the BBC World Service, Google News, Reuters and Al Jazeera was the Ivory Coast's Laurent Gbagbo and how he was holed up in the cellar of the Presidential Palace in Abidjan as troops loyal to Alassane Ouattara stormed the place. The Kenyan arrivals were relegated to the BBC's Focus on Africa programme.

But the Kenyan media have an amazing obsession with the negative and the bizarre: They are hell-bent on creating a country of cynics and pessimists. Indeed, occasionally, Kenyans are even described as being among the world's most optimistic people. But our media behave as if we are a nation of cry babies and professional doomsayers, serving us a news diet predicated on doom and disaster.

Where is the saturation coverage and killer hype when Kenyans run rings around others and win marathons the world over? Where were they when Prof Wangari Maathai won the 2004 Nobel Peace Prize and Time, the global US newsmagazine, got through to her first with their feature "10 Questions for Wangari Maathai"? Neither NTV nor Citizen has ever sent a crew abroad to tell the wazungu about the Seventh Wonder of the modern world, the Great Migration of wildebeest in the Maasai Mara.

One of the great untold stories about the Mau Mau case going on in London.The case is so serious and gross that other international media are paying keen attention to it while our media preoccupy themselves with non material.Our media should be cocentrationg in wanting to know the details of the files ordered released by the high court in london

But does our media people ever listen....?