Sunday, October 28, 2012

Here's how to create 3 million jobs and grow at 20%.

I share these ideas in the hope that they will change the fortunes of my nation. I share these thoughts, as a moral obligation to my generation and our common offspring, as a patriot's remit. Partly to offer leadership out of our economic and political morass, and as a repayment for the opportunities that Kenya has offered me. And to spell out my vision for an Africa that has come of age, and steadied itself for the long leap that sustained, common prosperity demands. I hope to inspire actions that will push and finally lift Kenya over the high horizon of hopelessness that has prevented us from reaching the promised land; from attaining our heritage of splendour.

Our zero-sum politics, xenophobic, tribalist society, burgeoning hordes of disillusioned youth and a leadership that leaks courage and lacks conviction have been our fate for too long. Yet, that is not as it should be at all. Indeed, as any sensible person knows, much gathers more and loss leads to greater loss. Our challenges are bound to grow, and our few opportunities will only lessen, if we fail to stand up for good, to reject the worse and choose the better way out.

All of our good people will be safer in the long run, if they offer and effect positive solutions. And again, their little good efforts will gather more, and cause ever larger gains. Convinced thus, here is my way out; my considered view of an immediate solution: a solid path out of the palpable despondency and obvious distress in whose vicious swirl millions of Africans find themselves inundated.

How To Create Three Million Jobs Immediately.
It might appear simpler than you credit - too simple, in fact.

The government should offer minimum interest long-tenure mortgages to qualifying citizens. Let us  give Kes. 2.5 million at 4 per cent interest rate, to build decent homes, to every person who earns Kes 40,000 or more a month, payable over a term of 25 years. Let us give this to our policemen, teachers and soldiers every year, for the next two decades to create 10 million homes for every person.

Why this is important:
First, decent housing is a core promise of our Constitution. It is a progressively attainable right under our Bill of Rights. Secondly, the real estate sector, as presently structured, is privately driven in the free market, which profits from shortages, and caters only to the already rich. And private sector real estate growth is predominantly urban orientated. It is controlled by fewer than 100 companies which are limited by financing and administrative bottlenecks. Thirdly, and most critically, this idea will create three million jobs each year.

From a psychological stand-point, a decent home is a spur to social decency and increased economic aspiration. Consider a child raised in the opulent greenery of Runda and Kitisuru, and another in the filthy trenches of Mukuru and Mathare. Their outlook on life is to a larger than acceptable extent, determined by the sanitation of their environments. I am persuaded to think that housing impacts self-esteem and an estimation of social worth. And that is a possibility I would want to sponsor. If children will want more than their parents had, I would rather we prop up present age parents, so as to raise motivated future parents whose worldviews will be unlimited and very vibrant.

On the jobs score: let's start with lending out Kes. 2.5 million to 50.000 Kenyans to build 50,000 new homes all across the countryside per year. Assume, for a second - no, truly think long and hard about it - that, this will create direct employment to 3 million workers:-

  • Three sand harvesters per lorry of sand, 10 lorries per home: 30 on 50,000 = 1.5 million;
  • Two workers on each lorry ferrying sand = 100,000 lorry transport jobs, assured.
  • Three workers producing each concrete building block, 3000 blocks per home = 9,000 by 50,000.
  • Market and jobs in the cement production and stone-masonry and hardware businesses.
  • A construction tradesman and four assistants working on each home = 200,000 jobs
  • a) Wood workers making windows and doors, three per new home, 20,000 homes: 60,000 jobs supporting the carpentry and timber sector, creating market for wood products, and improving furniture standards around the country.
  • b) Metal workers forging steel doors and windows on 30,000 homes: 90,000 jobs to support the steel market, and improve skills in the housing supplies sector.
  • Three workers on each roof: 150,000 jobs. A huge market for roofing materials - wood, tiles, iron-sheets, ceiling materials, chimneys, - support for 450,000 sector jobs;
  • 10,000 electricians and power installation jobs; 10,000 power inspectors, and 50,000 new customers for the electricity market, creating more background jobs: an assured market for manufacturing of housing supplies, increased demand, production efficiencies, supply chain efficiences, profitability.
  • 10,000 plumbers, and increasing demand for water and sewerage services, perhaps 20,000 new jobs created in expanding that sector.
  • Overall increase in transportation of supplies will provide a market for transport business owners, increase road fuel purchases, earning revenues for government and sustaining jobs.
  • Home equipping after construction: painting, fencing, garbage collection, upholstery and furnishing, household energy - better homes will encourage uptake of better energy sources - i.e. less firewood, more biogas, liquefied petroleum gas, solar power and mains electricity, about 200,000 related jobs.
And the total annual cost is almost minimal: Kes. 2.5 million on 50,000 homes is Kes. 125 billion only, all invested in Kenya, with the related stimulus impact you can imagine. And it will be productive, not consumptive capital expenditure, to boot. 

Housing Influences People
Housing changes tastes and preferences, and substantially redirects economic choices. It is the perfect starting point to a growing and working nation, since people will generally protect and promote their own personal wealth and private interest. The people will be more tolerant of their neighbours and will defend peace in their neighbourhoods, as they have interest in national peace, to preserve what they will have worked hard to own. Homeless people are more easily agitated against home owners or their more prosperous communicants.

Improving housing will increase demand for government accountability and action, as people will demand services like wastes treatment, improvements in transport infrastructure and spread of opportunities for skills training, employment and local investments. It will lead to technical training of youth in construction skills, and create opportunities for employment across the country, and people from good homes are more likely to seek self improvement and better opportunities, both within and outside their communities..

Women and mothers will demand better nutritional and health choices, improving our nation's overall state of national health. Better housing will spread access to durable, higher quality home appliances, higher access to information and literacy through television, digital radio and the internet, and better choices in leadership. Better standards of life will improve attention to matters of national importance, and increase interest in government policy, with the expected improvements in demand for more  focused leadership.

Women's & Youth Economic Empowerment
When our women and youth are assured of good homes, they will invest emotionally and economically in their societies, seeking value in themselves and lower social tensions. It is the shield and cross-spears of our national coat-of-arms that will defend our peace and deliver the promise of a proud and rich homeland of Kenya, a new home for people with vast opportunities for progressive action.

But most importantly, increasing the gross national housing capital will reduce the housing inflation - artificially exploited by the private sector to make prices of homes unaffordable and prohibitive. It will keep our youth busy, and reduce the despondency and economic exclusion that keeps them bitter and easily prone to political exploitation and irresponsibility.

Hope and Progress
It will engender hope in the idea of Kenya, promote academic and economic effort to earn higher incomes that will qualify individuals into the promise of this programme, and higher incomes will improve family nutritional and health prospects, stabilizing birth rates. Great housing will be its own collateral, its own security and our nation's path towards faster devolution of government and social equality. It will be the first step to national transformation, and a guarantee of our cultural progress.

Again, mortgages will afford everyone the owner-occupier housing tax-breaks for families, reducing their tax burdens and increasing their purchasing power, hence lowering poverty. It will save women from total dependence on men for shelter, and improve their socio-economic independence.

For these and all the other reasons and ideas you will associate with this call, and which my thought has engendered in your mind, this is Kenya's most urgent agenda, and I enthusiastically promise to pursue it with all people of goodwill and similar opinion.