Safety nets key to entrepreneurism

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The Jubilee government is big on entrepreneurship. We have a women’s fund for women entrepreneurs. On the President’s website, many of his speeches make reference to unleashing entrepreneurship that comes bottled up in every youth across the country.

This is all encouraging to would-be entrepreneurs, except, wasn’t Kenya always a country of entrepreneurs?

Our streets are teeming with all manner of Chinese products, sold by men, women and children. On the matatu each morning, at least three people selling sweets jump in to tempt you to buy their wares. Our streets flood with hawkers every evening selling food, clothes and toys.

Two thirds of Kenyans are self-employed or are entrepreneurs. If ever-increasing levels of entrepreneurs are an indicator of a thriving economy, then we are an international powerhouse.

In the market place of ideas, our businessmen outperform all those lazy Americans who for years have pretended that capitalism was bottled at the foot of the Statue of Liberty.

We are a nation of go-getters where more than half the population has gone to work for itself. We are our own bosses, enjoy the dynamism and flexibility of being in business for ourselves. This dynamism and entrepreneurial zeal existed even before the Jubilee government came and promised to promote it through its many funds.

Greece, whose economy has been razed down by the European Central Bank, is the also a thriving hub of entrepreneurs. Austerity has coaxed animal spirits into the market. In Spain, where unemployment is in the double digits, self-employment has similarly boomed. Benin has 10 times the rate of entrepreneurs that the US has.

The least entrepreneurial countries are Norway and Luxembourg. It seems like the more advanced an economy, the less entrepreneurial they become.

If individual entrepreneurship or small bands of entrepreneurs is the key to economic growth and development, why are we poorer than the US?

Entrepreneurism is the law in Kenya. We have to bend backwards and acquire all manner of entrepreneurial skills than richer countries. This hasn’t led us out of poverty.

This idea that loans from Uwezo and Youth fund will spur entrepreneurship that will end up raising living standards in the country is false. The idea that we need entrepreneurs for economic development is not true. We need big government projects to develop, not atomised funds aimed at five youth who have banded together to sell chicken.

None of these funds will make a dent on the unemployment problem or raise living standards.

The Youth fund has so far only created employment for its board members. In Kenya, being an entrepreneur is horrible. The lights go out and your salon stops working. There is a police crackdown so you cannot sell your sweets in PSVs. All the while, Kanjo and the police are busy turning the screws to shake you down.

All the loans dished out meant to empower people make us end up with identikit businesses. They all had simu ya jamii then moved on to quail eggs and now are selling you land in Isinya. M-pesa has bottomed out, it isn’t a business that can be run by itself. Entrepreneurism is usually a race to the bottom for business as everyone piles on the latest fad. In Roysambu, they all sell clothes and brightly-coloured shoes. Every stall in Nairobi flogs clothes or second-hand computers. In Nairobi West they all sell booze.

Any business that can be started with Sh50,000 can be easily replicated to the point that profits are driven out. People with limited abilities have few options available to them. Half the youth do not finish their 12 years of schooling, and many are incapable of running a business.

A strong safety net is the key to entrepreneurism. The fear of financial ruin keeps many from venturing out. If you live in a strong welfare state, losing your job doesn’t mean your children will starve. There is no safety net in the country. No pension for your old age, no medical cover when you are sick and no paid maternity leave if you get pregnant.

This idea that the informal sector and government-sponsored microcredit is going to be the panacea for our unemployment is false. We need more schools and better completion rates, better healthcare and bigger ideas to improve unemployment among the youth. Uwezo haiwezi. Uwezo will not hack it.

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