Factors that undermine economic development in Kenya

  

Date Posted: 11/21/2012 11:51:29 PM

Posted By: fredrick mutua  Membership Level: Silver  Total Points: 196

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FACTORS THAT UNDERMINE ECONOMIC DEVELOPMENT IN KENYA

There are several factors that have lead to the slow economic growth in since independence. Hear will discuss only a number of the factors that have undermined economic growth in Kenya.

1. CORRUPTION
Corruption is the misuse of public power for private gain and is difficult to measure directly because of secretive dishonest nature according to the World Bank. Corruption is inimical to development; it perpetuates inequality, increases wealth and assets gaps between rich and the poor on national and regional scale, that’s why in Kenya some regions are more developed than others because they had been neglected by the previous governments that had control of the nation. Corruption also reduces the rewards for merit and reinforces the belief that the only road to success are through corruption and not through education ,thus returns to education are perceived to be low resulting in lower enrollment rates than would be observed in absence of corruption. Corruption prevents economic growth because it distorts incentives and markets signals, leading to mis-allocation of resources. Moreover, corruption in Kenya has degenerative impact because it destroys the productive capacity of the local talent and entrepreneurial skills. The opportunities for corrupt practice lead to practice lead to resources especially human resources, being channeled into rent seeking rather than productive activities. Corruption is strongly negatively associated with investment rate regardless of the amount of red tape. It reduces both the volume and efficiency of investment and thus economic growth.
Substantial gain in economic growth could only be achieved if corruption is reduced.

2. POOR ECONOMIC POLICIES
Poor economic policies in financial and also agricultural sector have really undermined the economic growth in Kenya. In agricultural sector the government reliance on rain fed agriculture and depending on only two cash crops rather than encouraging workers’ to diversify in different

sectors has led to the slow economic growth because agricultural sector is the back bone of the Kenyan economy. In housing sector, government failure to implement policies to deal with high population has led to growth of slum s because of limited housing facilities in the urban areas. Also in fiscal policies the government failure to control weakling of the shilling has led to increase in inflation rate in the nation. Failure of the governments to come up with solutions and mechanisms to deal with disasters like floods, drought and famine and health epidemics which affects the productivity of the economy in turn affecting the level of development, has been the norms of the governments we have had in Kenya. For example in 1998 the bomb blast on co-operative house and British embassy in Kenya showed how really unprepared we are for disasters. Other countries had to come and help to control the disaster that had occurred.
For the country to have development, proper policies have to be undertaken to deal with uncertainties in the future which would affect the performance of the economy.

3. POLITICAL INSTABILITY
Kenya is nation that has experienced a lot of political instability which have greatly slow down pace of economic development. The coup in 1982 and the assassination of various leaders created political tension in the country. Investors who would want to invest in the country lose confidence because of lack of security for their investments and their lives too. The recent political instability experienced during the 2007 post election violence led to some investors withdrawing their investments because the political situation does warrant them to carry out their businesses. This in turn leads to reduction in the nation income and employment opportunities that were provided by that particular investor. Tourism sector of the economy, which generates a lot of revenue for the economy, is also greatly affected by political instability because the levels of tourists who come to visit the country drop so rapidly and by the time we recover from the political instability a lot of revenue would be lost which could have steered the economy to greater heights.
Political instability greatly affects distribution of services and goods. It may bring an economy to stagnate or to deteriorate farther. Therefore political stability is a major recipe to development.

4. DISEASES
Diseases like HIV/AIDS and malaria which wipes out majority of young labor force in the country who are have expertise and various technical skills have a negative impact on the growth of the economy.HIV/AIDS majorly affects the youth who are the majority of the labor force in the country have really affected the pace of economic development in Kenya. These diseases create over dependency; because the populations affected by this disease are unable to work therefore rely on the working population for their needs. The money and the time used to cater for the people with these diseases could be used to do productive work that would enhance the growth of the economy.
Therefore, it is important to sensitize the public about HIV/AIDS so that we don’t lose productive men and women who can bring great economic development in the country.

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