By David Wanjala
The prediction has finally come to pass; Ethiopia has now surpassed Kenya as the leading nation, in terms of GDP, in East Africa. Regardless of the increasing GDP forecasted by major international institutions for Kenya, it was no match for the growing double-digit economy of our neighbour to the North.
Ethiopia’s recent public investments have been top notch compared to those in Kenya. The Kenyan government has focused so much on infrastructure and development with most of the projects being done through debt financing, leaving the country in huge debt. Corruption on the other hand has stagnated most of the projects, if not dragging their completion deadlines.
To add insult to injury, most of the projects have not really tackled the most important issues that concern the Kenyan people, for example, the recent famine and drought. The opposite can be said of the ever-growing Ethiopia that has focused on the needs of the people. Besides the electric train that beats Kenya’s diesel-run in efficiency and all other aspects, for instance, Ethiopia has invested heavily in electric power generation, producing more than is sufficient to sell the surplus to its neighbours including Kenya. Electric power being a major factor of production, this has meant that Ethiopia’s cost of production is much less and it is no shock that it is attracting more investors than Kenya does lately.
Entrenched corruption in Kenya’s governance system over the years, with its devastating effects on the economy majorly in low investor confidence and outright effects on the GDP, has been the major reason for Ethiopia surpassing us. As a result, we have already begun losing investors to our neighbours including Rwanda, Tanzania and Ethiopia. International companies considering moving to the country have to think twice as they have to consider their growth in the long run.
Unemployment, already a major concern in the country especially among the youth, will get worse as major companies with huge investment potential shy away. This has had a direct effect on job creation. Worse still, existing companies are closing shop, as many others downsize to cut on operating costs. Co-operative Bank has so far sent 160 home, Cadbury Kenya 300, Eveready 99, Tata Chemicals 200, Sameer Africa 600, Sidian Bank 108, First Community Bank 106, Standard Chartered Bank 300, Equity Bank 400, Sher Karuturi 2600, Kenya Meat Commission 118, Uchumi Supermarket 253, Telkom Kenya 500, Kenya Fluorspar Company 700, Kenya Airways 118 and Airtel Kenya 150, not to mention the turmoil in the mainstream media entities.
With this direction, we may soon end up playing second fiddle to economies in the region that have for long not been within sight behind us including Tanzania and Rwanda. It is really worrying.
