My main problem with Prof. "No. Last" is that he still does not know or is not willing to resolve the real issues affecting our economy. He has simply transferred the problem from forex rates to interest rates.
My question is why would anyone claim that our economy is expanding too fast, it is not, we only manage stuttering growths of a maximum of 5-6% for 1 year every five years between elections. How then can you compare us to China who have been growing at 10% for the last 30 years.
The current solution of increasing interest rates to reduce growth is all wrong, we need this growth to expand the job market.
Example lets look at the construction industry that was booming for the last 5 years before the prof killed it. The industry has been:
1. providing jobs to the youth and unskilled labourers who in turn expand consumption
2. supporting the expansion of other industries e.g cement and banking through expanded credit.
3. supporting the savings culture through kenyans who purchase homes or take out mortgage
The increased interest rate has;
1. killed the credit markets for both construction loans and mortgages
2. will lead to loss of jobs
3. will lead to defaults
4. will lead to kenyans spending more and saving less as there is no hope of ever owning a home.
I would really like someone to explain the profs. thinking when he took this action.
Our inflation is imported therefore, the logical thing for me should have been for the government to discourage more imports through enhanced tarrifs and non tarrif barriers. I beleive such action is allowed by all international trade agreements when its done to protect one's economy.
long term solutions should be to improve food production and own production.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins