The kazi-kwa-vijana is a programme that largely fulfills John Keynes’ prophesy: in bad economic times, a government might as well bury banknotes in jars underground, then employ thousands of (young) people to dig them up.
For a government that is held hostage by economic bandits and cronist merchants, high funds leakage rates could render such a stimulus plan ineffective.
And it goes like this: Section 46 of the Central Bank of Kenya (CBK) Act allows the bank to make direct advances to the government for the purpose of offsetting fluctuations between receipts from the budgeted revenue and payments of the government on condition that it is secured by negotiable securities with a maturity of not later than 12 months.
Expectedly, the proceeds will be used to fund a more ambitious economic stimulus program; and upto a third of the programme should go towards credit guarantee scheme for businesses, especially SMEs, that have shut down due to the pandemic.
To execute this, Parliament needs to amend the CBK Act to (i) extend the tenure of such a negotiable security to beyond 12 months; and (ii) increase the cap of advanceable funds to the government to beyond the current five percent (of audited revenues).
