Uncategorized

Costly loans brings down GDP growth to 4.7 pc

EconomyThe Treasury has estimated that Kenya’s economic growth rose slightly to 4.7 per cent from 4.4 per cent in 2011, which is below the official projection of 5.1 per cent.

Economic Secretary Geoffrey Mwau said on Wednesday, revealing the figure which was yet to be announced officially, that the GDP growth, aided by adequate rainfall, was likely to improve this year to at least 6 per cent.

The first half of 2012 was marked by high lending and inflation rates that restricted investment.

Mr Mwau said that the Treasury expected a fairly manageable transition to the next administration once the General Election is over next month.

He told a symposium called by the Institute of Certified Public Accountants of Kenya (ICPAK) that the higher growth projection is based on steady inflows of foreign direct investments, rainfall, continued reforms in the use of public funds, and macro-economic stability.

Both the World Bank and the International Monetary Fund have predicted a 6 per cent GDP growth for Kenya in 2013, but emphasised that this could be brought down to 5 per cent under less favourable economic and political conditions.

Mr. Mwau added that the East African region, which was their main market, was becoming resource rich. This was changing the dynamics of growth and they expected more flows in the form of foreign direct investments.

Low inflation, falling interest rates, and a stable exchange rate of the shilling were encouraging higher growth.

Mr. Mwau said that the great interest in the region had attracted mineral exploration and that was likely to continue bringing in FDI. Kenya was ranked second in sub-Saharan Africa last year in terms of attracting FDI and they had inflows due to investments in geothermal generation, oil, and mineral exploration.

He revealed this while he was speaking at the ICPAK symposium called to discuss realisation of devolution in Nairobi.

But, other speakers at the forum expressed fear that a high public wage bill would continue to hamper the economic growth. They said that the large wage bill placed constraints on the implementation of the development Budget as well as flagship projects under Vision 2030.

Nicodemus Odongo, director of research, compliance, policy and planning at the Salaries and Remuneration Commission said that the public wage will had gone completely out of hand and needed to be checked because it threatened economic growth as half of the revenue was going into payment of salaries and wages.

While making a presentation, Mr Odongo showed Kenya’s public wage bill was 12.1 per cent of GDP as against the best practice of 6.5 to seven per cent.

Consequently, the wage bill stood at KSh. 457 billion, which was 27 per cent higher than two years ago after a series of payment increases to civil servants, teachers, doctors, and lecturers.

Mr. Odongo said they were reviewing the salaries and allowances of state officers and the public had indicated that the payments were too high, and they would be having a final say in the matter soon. Mr. Odongo said that the concern was not so much against the actual basic salaries, but the allowances.

The Commissioner for Implementation of the Constitution, Charles Nyachae, advised politicians against being too optimistic about the ability to deliver at the county level. He told the symposium that one major challenge that devolution will face are public expectations and devolution will not take place overnight and it cannot happen that easily.

Image courtesy: FreeDigitalPhotos.net

Leave a Comment

Your email address will not be published.

You may also like

Growing a Business

Want Great Guidance ? Find yourself a Super Mentor

post-image

They are the gods of small businesses, those inspired individuals who have achieved the highest levels of success. They can be the shining beacons who light up the path of running your business with their vision, wisdom and wealth of resources and contacts. They are The Mentors.

If you are fired with the passion to take your business to great heights, the best thing to do is find yourself a super mentor. Here are some tips to help in your quest

Pinpoint your Need

Sit down and focus your thoughts on your business growth strategy. Which area of the business needs a lift. Is is staffing, is it the finances, is it the production, is it the your lack of customers or is it the business as a whole that needs a makeover. Once you’ve zoomed in on the sore spot, this is where you need…

Read More
Growing a Business

Dreaming Big? You can Move Mountains with these Business Productivty Tips

post-image

You may be full of admiration for some people who seem to manage themselves and their work so usefully and efficiently. They seem to fit in so much productive work into the same number of hours which everyone has.. Let’s look what makes them tick and take a few tips.

Learn to identify your most productive hours

Its true, most productive people know which time of the day they can be most creative and efficient. They identify and allot these hours for the best part of their work. This way they are able to give their 100% awareness to the job and business productivity.

Early to rise- A winning habit

Waking up early is a personal habit that has all the plusses on its side. You need not necessarily go to work that early. It’s a habit that gives you more time for personal care, like mediation, exercise, walking,…

Read More
Growing a Business

Leadership Qualities that can make you an Icon

post-image

You may have reached the leadership position through sheer dedication to performance and a do or die attitude . Now that you are at the top, your viewpoint needs to change. You have to now be a role model, one whom others will look up to and follow. Here are some tips that can shape your leadership and management skills

Be Competent: Employees will look up to a leader who has good industry knowledge and management skills. If you do not possess these skills you should surround yourself with knowledgeable people who can offer good counsel. Competence is a trait all employees will admire.

Be Trustworthy: No one will look up to a person they cannot trust. Your employees will want to rely on you and count on you. In difficult situations, leaders are expected to apprise their employees of the situations and find solutions on how to address…

Read More
Raising Money

Are You offering Your Services Using the Right Pricing Strategies?

post-image

In these times of fierce competition, business people , mostly those that offer services and belong to the service based industry, are finding it a challenge to implement the right pricing strategies. It is virtually a struggle to set the right business price that will retain and attract the customers, and not drive them away. Follow these tips, the crucial dos and don’t s and you may be in a much better position to offer your services at the best price.

Maintain your Business identity and Dignity

If you are offering a unique or special product or service, don’t underrate it just because you want to build a better relationship with the customer. This will just cheapen your offering as another run of the mill. If its something special you are offering the customer, then communicate this fact to the client and get the equation right with the most…

Read More
Raising Money

What is a Fair Wage? How Do you Assess Fair Wage?

post-image

How do you figure out a fair wage?

This is a very common question for startups and small businesses. They can’t seem to decide or understand how to set wages and manage reputations at a time. They are determined to pay well but they also have to think about encouraging their employees to stay with them for a long time. This is why there is a need to think strategically.

Listed below are a few expert tips to help you decide:

Don’t Focus Only on Money

Money should never be the main focus for you or for your employees. You should decide on the wages in such a way that your employees are tied to your business. When your business does well they should be able to taste that success and vice versa.

Also, think about additional perks such as exclusive benefits and time off. Many employees value this more than the overall…

Read More
Raising Money

Tips to Winning Hard Negotiations With Ease

post-image

While some negotiations are easy, others are quite hard to win. If you stumble you will lose.

Whether it is a potential client or an investor, negotiations can be very tough and frustrating. The problem is that the moment you let your frustration overwhelm you, you will lose the deal and you will give in to whatever is being offered to you. In order to avoid that, here are tips to overcome tough times and to win even the hard negotiations:

Research!

Know your opponent as well as possible. This is the rule no matter what you do. You should understand your opponent to the T. Who the person is, what his culture is, what he thinks, what he stands for, how is his network, etc. are the questions you should ask yourself and answer through research before meeting up for the negotiation. Understanding the opponent will give you a great advantage.

Walking…

Read More