Thread by @ephraimnjegafan

WHY UDA HAS MISUNDERSTOOD BOTTOM UP ECONOMICS.
It is interesting that @UDAKenya can't clearly explain their bottom up economic model. These guys' understanding of the economy is poor and dangerous.
THREAD 🧵

Kenya has a very huge informal sector. Almost 90% of the economy is informal. This is a big problem. The informal sector creates many, but low quality jobs. It operates beneath the regulatory radar which makes it hard to be taxed.
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It also makes planning hard since the government lacks data about these enterprises. Its survival orientation impedes upward mobility. The focus of any government in Kenya should be to increase the share of the formal economy.
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It should be about moving from 'Survivalpreneurship' to growth oriented enterprises. A UDA government would increase the informal sector.
This doesn't make economic sense.
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Most people in the informal sector are there out of necessity rather than choice. Many would be happy to get a job paying even a salary of KShs 15,000 per month.
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UDA seems to understand bottom up economics as a zero sum game, in which the informal sector is to be promoted at the expense of the formal sector. This is dangerous thinking.
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The informal sector maybe 90% of the economy but it probably generates less than 10% of tax revenues.
Furthermore, the informal sector only survives because of support from the formal economy.
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For instance, a teacher employed formally by the government consumes bodaboda and Mama Mboga services.
If you focus on promoting the informal sector there will be saturation & enterprise cannibalism. The informal sector operates under the principles of perfect competition.
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If for example you finance a million more people to buy motorcycles you will reach a point where no one will be making any significant profit. The bodabodas will take home less than KShs 200 (daily if lucky).
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Bottom up economics as espoused by UDA amounts to glorifying poverty. It is all about controlling the masses by making them poor and dependent on the political class. If it is implemented as understood, it would definitely destroy the economy.
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True bottom up economics seeks to increase and stabilize the incomes of the people at the bottom of the food chain by creating quality jobs. This is done by formalising the economy.
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The bottom up UDA is promoting is a utopian fallacy. It might make political sense but certainly makes no economic sense.
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