According to Kenya economic survey, in 2018 remittances through official channels reached KES 280 Billions. There are also remittances through informal channels which means that Kenyans do receive lots of cash from their relatives abroad. Going by the same survey this cash is more than what treasury sent to county governments and about half the wage bill in 2018. Still, this amount is enough to clear a maturing Eurobond.
The problem is receipients do not make appropriate use of these funds. The “wisest decision” to make is investing in real estate. However, real estate is only profitable for individuals and not the nation. Considering landlords barely pay tax, it is difficult to get value from such investmernts. As we complain about mismanagement by government departments we should also consider mismanagement and poor investment at household level. Others use the money to sustain small holder farms with low yield but hardly realize they are actually making losses. It does not make sense to have two dairy cows with a cost of production of 42 shs per litre while the collection dairy pays 28 shs per litre.
Remittances would be better off being invested to large institutions interested in infrastructure development and commercial agriculture. Profitable Agribusiness, and infrastructure like hospitals, industries and railway are the primary investment necessary for this country to grow.
Tulisema Manufacturing and processing industries ndio tunahitaji, lakini kina wytiti wakiloot no maflat tu wanajenga. … Plus stima is too expensive. We are between a rock and a hard place
In a village, 10 successful sons of that village will build houses, in the village with a combined value of 100 million.
The village will forever complain why the government cannot build a factory to process their tomatoes, and employ the villagers (at a cost of 50 million)
A local will invest 500 million in 5 houses in Karen, and bow down to a Indian who came to kenya and invested 50 million in a manufacturing business,
This analysis is stupid, one coz almost 80% of that remittance is for Familiy upkeep, food, rent, fees, and health care.
The assumption of honey abroad is the basis of this analysis. Hardly a percentage of that remittance goes into investments in reality…
Mind you working abroad is just as working in Kenya only that, you atleast have some money to send back home for your family’s upkeep, and you are able to save a bit on the side…
@KamauLM long time no see
Hii forex yote peasants wanapeleka inje na bets, na wengine wanaimport magari kubwa kubwa.
That is a very sound observation. We need well structured options for investment. Real estate provides jobs,local raw materials are bought etc. The thing is if it can be invested in big four housing agenda as a source of capital then when houses are sold the investors get their returns
Well I don’t see why landlords should pay tax when Kenya is of the most highly taxed nations in the world and there’s nothing to show for it. Let me tell you nations paying the level of tax Kenyans pay have free university education and free public transportation so spare us. If we are losing a trillion a year to corruption. It’s obvious what Kenya needs isn’t landlords to pay tax. Or anymore tax than what is there. There’s even no need for punguza mzigo and other osterity measures. What we need is to bring back even half of that trillion that ends up in pockets it should not OK?
Secondly Africans don’t live to make profits. We are more socialist than capitalist so we don’t need to do things bcz they’re profitable or make maximum returns. I may be happy with my cows as minimal as the margins may be, it gives me a sense of fulfillment and I have some milk for my household. We are Kenyans and Africans not whites so hizi lectures zako peleka wazungu wannabes usitusumbue ati peculiar habits. That’s what is so special about us. Our peculiar habits that even MJ could not understand.
And by the way those enterprises you think are more profitable than the 2 cow dairy farmers Utashanga a. Besides the ones belonging to mzungu.The state ones have lower output and higher cost of production than private farmers uliza Kenya seed who are their best producers its private farmers. Same to milk. Private farmers have a higher unit production than guys you’d expect to benefit from economies of scale.
In your demented mind unless the government steals a part of your labor there’s no value created.
… a while back I watched a documentary on KTN news that helped me realize it was better for citizen abroads to invest in infrastructure bonds than send the money directly to relatives. At the end better infrastructure means better welfare for their relatives. For instance, if we have good hospitals at the grassroots then healthcare becomes affordable as opposed to sending money for expensive treatment far away.
Niko bro, ni kutulia kiasi nikingoja revolution.
Nimepokea salamu, sasa remit 50 dollars nitoe sadaka kwa chief general Komanda.