Kenya growth at risk over high interest rates, says William Ruto

PHOTO | FILE The Central Bank of Kenya.  NATION MEDIA GROUP

In Summary

• Mr Ruto also raised concern over the role of small scale farmers in addressing food security in the country
• He was speaking in Nairobi on Saturday when he officially opened the African Economic Research consortium's 25th anniversary

By Nation Reporter
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Deputy President William Ruto has said Kenya is at risk of not attaining double digit growth unless high interest rates charged by banks is addressed.

The Deputy President urged experts in the financial sector to look at ways of bringing down the interest rates in order to allow Kenyans to borrow and do business.

“With the current interest rate of about 20 to 25 percent I wonder what kind of business one is supposed to do in order to get returns unless one is doing drugs,” said Mr Ruto.

He was speaking in Nairobi on Saturday when he officially opened the African Economic Research consortium's 25th anniversary.

He added that the trend could not be allowed to go on and therefore challenged policy makers in the country to match policies with realities that Kenyans face.

“We are locking out almost the whole population who these support need be they the poor or those in the middle class. Even the middle class cannot now afford to own houses due to high cost,” said the Deputy President.

FOOD SECURITY

Mr Ruto also raised concern over the role of small scale farmers in addressing food security in the country.

“We have to look at the role of peasant farmers or small holders in relation to commercialization and mechanisation of agriculture and what their contribution is,” said Mr Ruto.

He noted that most of the peasant farmers or small holders were leading in buying food to meet their needs.

“We have earmarked 1 million hectares of land that we will put under irrigation and we are targeting to produce food twice what these peasant farmers are able to do,” said Mr Ruto.

He noted that the government was aware that growth does not automatically reduce poverty and was putting in place measures to fight poverty by uplifting the poor.

Mr Ruto added that the government agenda is to incorporate the idea of shared prosperity to design policies and interventions for strengthening equal opportunity, broad-based, value-added, ICT-supported economic activity.

He said that agriculture still presents the single most important focus for poverty reduction efforts.

“The role of education and research in this agenda is simply immense. Our aim is to generate wealth and employment, take our trade balance to the next level, significantly reduce poverty and usher Kenya into the league of middle-income, industrialised nations,” he said.

Cabinet secretary for Devolution and Planning Anne Waiguru said that the government was determined to ensure that there is enough human capital in order to grow the economy.

Ms Waiguru challenged local and international researchers to come up with policies that will spur economic growth.