¶ … Kenyan reform policy Successful?
The need for reform in Kenya has been clearly demonstrated. But the question remains, has this reform been successful? The slogan of "Harambe" fueled the passions of the Kenyan people and drove them to strive as one nation to lift themselves up from poverty and oppression. It has been ten years since the last reform and it is now time to look back and see what has been accomplished.
To measure the success of the reforms we will consider several economic indicators both before the reform and after to see how they have changed. Then these factors will be considered as a whole to develop a better outlook on the entire picture. We will consider education, the performance of the industrial sector, the trade and tourism sector, the finance sector, rate of inflation, employment and wages, the agricultural sector, construction, social services and some comments on general conditions of the average person in Kenya today.
Education
It is conventional wisdom to stress the importance of education, a measure of human capital accumulation, in determining growth. After independence, Kenya experienced a major educational expansion but experienced economic slow down in the 1960s followed by stagnation in the 1970s and decline post-1980 (Appleton, 1999). Like the subcontinent as a whole it has experienced educational expansion but poor economic performance. At present, Kenya's educational achievements are above the average for the subcontinent with an illiteracy rate of 22% in 1995 compared to 44% in the subcontinent as a whole.
Its income is below average, in 1997 its GNP per capita in was $1,110 compared to $1,470 in the subcontinent. (World Bank, 1998). One common critique of conventional rate of return to education estimates is that they are based on urban wage employees. This may be appropriate for males in industrialized countries, but is questionable in developing countries where most of the population depends on self-employment. For the years for which we have data, we find rates of return to education within self-employment are comparable to those for wage employment. Education does have strong effects on the probability of employment and self-employment, an effect missed by conventional analysis of returns within employment (or self-employment) alone. However, earnings differences between the two kinds of activity are not sufficiently large to make this a major consideration for men. For women, low rates of labor market participation implies that education may have a much stronger effect on earned income than implied by conventional estimates (Appleton, 1999).
With higher literacy rates than the rest of the African continent, it would seem that their GDP per capita should be higher as well. But this is not the case and it seems as if education is not the only factor in determining economic growth.
Industrial Sector
Kenya's industrial sector has grown substantially over the years with its contribution to Gross Domestic Product (GDP) rose from about 8 per cent in 1990 to 14 per cent in 1994. There are more than 700 medium and large-scale enterprises of which 200 are foreign multinationals, mostly from the United Kingdom, the United States of America, Germany and the Far East. The major industrial exports include refined petroleum products and cement (Kenyaweb.com, 2001). This sector points to economic growth since the reform as this sector is a major source of employment, growth in this sector would b expected to have positive influences in other sectors as well.
Trade and Tourism
Another sector that has gained increased importance in the Kenyan economy since 1963 is trade, restaurants and hotels, including tourism. At the time of independence, the contribution of this sector to the national economy was minimal. Today the sector is the third most important, accounting for nearly 12 per cent of the total annual national output. By 1996, the country had earnings from tourism rising from 1,250 (Million Kenya Pounds) in 1995 to 1,280 million (Kenya Pounds) (Kenyaweb.com, 2001).
Finance Sector
With the general growth of the economy, other services such as banking, insurance and business have also expanded. Real estate services have also grown substantially over the period, reflecting largely the rapid expansion that the country has experienced in its urban population. Altogether, the contribution of these services to the gross domestic product, which was 16 per cent, had almost quadrupled by the end of 1990 (Kenyaweb.com, 2001).
Inflation
In 2000, the Kenyan economic growth rate was at its lowest since independence in 1992 by registering a 0.4% increase. Inflation rose to 27.5%. Political reforms that led to the reintroduction of multi-party political system led to economic...
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