Kenya has the potential to become the leading economic power in Africa, similar to Singapore’s famous rise as a global economic hub. This potential was captured by Professor Tyler Cowen of George Mason University in his article “Kenya Is Poised to Become the Singapore of Africa” on Bloomberg in 2023.
The optimism is based on the country’s key advantages, including a young, skilled workforce, infrastructure, digital technology, and a strategic geographical location.
However, for Kenya to emulate Singapore’s remarkable economic development, bold reforms are required.
In this article, I will discuss how Kenya can become Africa’s Singapore. I will cover in detail the internal challenges that hamper our transition from the third world to the first world.
Let’s start with a quick review of Singapore’s path to economic boom.
The Singapore Story: From Third World to First
Singapore’s remarkable journey from a small, resource-poor nation to a global hub is captured in the book “From Third World to First” by Lee Kuan Yew, the first prime minister of Singapore, serving from 1959 to 1990. While the success is multifaceted, several strategies were particularly instrumental.
First, Singapore’s government adopted a zero-tolerance policy on corruption. This, along with political stability, gave foreign investors the confidence to make long-term commitments. Mr Lee Kuan Yew built a clean system that set a high standard of integrity. He is strong against corruption to the extent of cutting ties with close allies.
Second, Singapore pursued an export-oriented model, allowing its industries to tap into the global market. This led to a deep integration into global supply chains and rapid growth.
Third, the Asian country attracted foreign direct investment by providing a a business-friendly environment with low taxes, minimal tariffs, and streamlined regulations. For instance, the corporate tax rate in Singapore is 17%. The multinational corporations (MNCs) brought in capital, technology, and expertise.
Fourth, Singapore’s government invested in its people through high-quality education, ensuring the country had a highly skilled and educated workforce.
Also, the government invested heavily in developing a high-quality infrastructure to support its economy. The efficient transport and telecommunication networks made Singapore a hub for logistics and commerce.
What Holds Kenya Back (Challenges)
Corruption and poor governance: Kenya still struggles with corruption, often characterized by bribery, fraud, nepotism, and embezzlement of public funds. All cases of corruption undermine investor confidence, drain public resources, and weaken infrastructure development. The lack of political will and inefficient institutions hinders the fight against corruption in the country.
Inequality in education: Kenya’s education and health systems are characterized by disparities both in quality and access. Many children in the country, especially in rural areas, receive unequal education due to factors like limited infrastructure, a shortage of qualified teachers, poverty, and lower parental educational levels. This hinders the discovery of talents, ultimately denying the country potential innovations.
Skills Gap: The mismatch between education and industry needs remains a significant challenge for employers and companies in Kenya, particularly in sectors like digital technology, hospitality, and construction. This weakens the competitiveness of Kenyan firms.
Political instability: Kenya’s frequent political upheavals and ethnicized politics affect social cohesion and slow reform momentum.
Dependence on Agriculture: Kenya still relies heavily on rain-fed agriculture, which is vulnerable to climate change.
Broken/dysfunctional families: The rate of broken and dysfunctional families in Kenya is on the rise. Additionally, marriage is on decline as fewer young people choose to get married due to the shifting views on commitment, growing concern about the high cost of living, and peer pressure via social media platforms. Kenya’s policy on overseas employment leaves a trail of broken families, destroying the very fundamental pillar of the economy, the family.
Increased uptake of gambling and risky investments: Gambling and other risky investments hinder entrepreneurship, a key component of a thriving economy. While gambling contributes to government revenue, it mops up billions of shillings from the economy, hindering economic development and job creation.
Import-led growth: Experts describe Kenya’s economy as based on an import-led growth model due to the economy’s dependence on imports. The import-led strategy also hinders the development of local sectors such as agriculture and manufacturing, leading to slow economic growth.
Policy recommendations
Kenya has real potential to transform into Africa’s Singapore. The following policies would help to unlock this potential.
Zero tolerance on corruption: Kenya must strengthen institutions, digitize governance, and establish a culture of integrity. Also, it is imperative to reinforce anti-corruption institutions, uphold the rule of law, and ensure robust enforcement. The government should continue digitizing government services by exploring new technology like artificial intelligence.
Promote equity and quality in education: The government must build a strong education system where every child receives quality education, regardless of their background. We must abolish the categorization of schools, improve infrastructure, and ensure equal distribution of resources. This will increase talent discovery and produce a highly skilled workforce, making the country attractive to foreign multinational corporations seeking a talented labor pool.
Pursue export-oriented industrialization: Kenya must pursue an export-led industrialization in order to become truly wealthy. The country must move beyond primary industries and push for value addition. Also, they must ensure that smallholder agriculture is seamlessly linked into agro-industry chains that make higher-value products. Continued investment in the energy infrastructure is also critical. Finally, the government must expand Special Economic Zones (SEZs) strategically and offer investor-friendly incentives.
Reduce the corporate tax rate: Kenya’s corporate tax rate is 37% compared to Singapore’s rate of 17%. We must reduce the corporate tax rate to boost entrepreneurship and attract foreign investors.
Address skill gaps: The government must boost STEM education and research and development (R&D) in the private sector. Also, we should establish lifelong learning programs to offer Kenyans an opportunity for continuous learning. This ensures the workforce acquires new skills to address the manpower needs.
Ban gambling and support entrepreneurship among young people: A total ban of gambling will free up our young people to engage in entrepreneurship, leading to increased productivity and more jobs.
Promote marriage and stable families: The government, in partnership with the Church and other stakeholders, must implement programs to encourage participation in marriage and prevent unwarranted divorce. Stable families provide children with a secure environment that facilitates healthy emotional, psychological, and social development, ensuring peak productivity in future generations.
