In the days when parents dished out caning as regular as githeri or ugali, one learned very carefully the reasons older siblings got caned for to avoid the same fate.
Kenya is one of more stronger adherents of capitalism in Africa. And yet, you look and at how many safeguards they have out in countries like the US and the UK then you look at the last 5 years and you ask this. Do we know what we are doing? Do we understand the rules of capitalism? Are we alert enough to learn the lessons so we can avoid the excesses of capitalism?
Because the banking sector is recognized as an important cog in the capitalism wheel, its heavily regulated and monitored. You have to submit regular reports (daily, weekly, monthly, quarterly et al); you regular and irregular supervision that looks not just at the usual CAMEBCOM criteria, but also record-keeping; money-laundering; chinese walls and so forth. And yet with all this, firms have been falling like a pack of cards this year! Partly because of the external environment didn't take cognize of the fact that leverage is leverage no matter what. Its a rubber band and can snap... Look at the situation in Kenyan where banks have been hounding guys to take up loans mostly with some of the loosest form of collateral known to mankind. A pay-slip...
The stock markets in the West are classed as strong because investors are by and large well informed; there is a depth and breadth in terms of products and liquidity and listed forms have strong governance code on structure and reporting requirements. Again, you still have cases like the FSA saying that its own estimate is that upto 21% of all M&A have insider-trading! You then look at our NSE and its almost exact opposite of this.
Above all, capitalism only operates well, where the societal structure is stable and has widely agreed norms and values. We haven't yet agreed on how we should be governed.
What we must do urgently is customise capitalism so that it works for Kenya rather than we working for capitalism.
1 comment:
I think the capitalism in operation in Kenya is the crude one whereby every man is for himself, and an urgent reform of this is needed and starting with the constitution is the way to go to renew and strengthen our systems
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